parsippany-troy hills - new jersey · 2016. 12. 2. · parsippany-troy hills township schools 292...

Parsippany-Troy Hills School District

Parsippany County of Morris

New Jersey

Comprehensive Fiscal Financial Report For the Year Ended

June 30, 2016


Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016

Parsippany-Troy Hills School District Parsippany, New Jersey

Prepared by Parsippany-Troy Hills Business Office

Table of Contents (continued)

INTRODUCTORY SECTION

Letter of Transmittal Organizational Chart Roster of Officials Independent Auditors and Advisors

FINANCIAL SECTION

Independent Auditors' Report

Required Supplementary Information - Part I Management's Discussion and Analysis

Basic Financial Statements Government-wide Financial Statements:

A-1 Statement of Net Position A-2 Statement of Activities

Fund Financial Statements:

Governmental Funds:

Page

1 5 6 7

8

11

21 22

B-1 Balance Sheet 23 B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances 24 B-3 Reconciliation of the Statement of Revenues, Expenditures and Changes

in Fund Balances of Governmental Funds to the Statement of Activities 25 Proprietary Fund:

B-4 Combining Statement of Net Position 26 B-5 Combining Statement of Revenues, Expenses and Changes in Net 27

Position B-6 Combining Statement of Cash Flows 28

Fiduciary Funds: B-7 Statement of Fiduciary Net Position 29 B-8 Statement of Changes in Fiduciary Net Position 30

Notes to the Basic Financial Statements 31

(i)


FINANCIAL SECTION (continued)

Required Supplementary Information - Part II

Schedule of Funding Progress - Post-Employment Healthcare Benefit Plan

Schedule of Employer Contributions - Post-Employment Healthcare Benefit Plan

Schedule of the District's Proportionate Share of the Net Pension Liability- Public Employee's Retirement System (PERS)

Schedule of District Contributions - Public Employee's Retirement System (PERS)

Schedule of State's Proportionate Share of the Net Pension Liability Associated with the District - Teacher's Pension and Annuity Fund (TP AF)

Notes to Required Supplementary Information

Required Supplementary Information - Part III Budgetary Comparison Schedules:

C-1 Budgetary Comparison Schedule General Fund -Budgetary Basis

C-1 a Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Budgetary Basis - Not Applicable

C-1 b Community Development Block Grant Program - Budget and Actual-Not Applicable

C-2 Budgetary Comparison Schedule - Special Revenue Fund Budgetary Basis

Note to the Required Supplementary Information C-3 Budget to GAAP Reconciliation

Supplementary Information

D School Based Schedules Not Applicable

Special Revenue Fund: E-1 Combining Schedule of Program Revenues and Expenditures

Budgetary Basis E-2 Schedule of Preschool Education Aid Expenditures -

Budgetary Basis Not Applicable

Capital Projects Fund: F-1 Summary Schedule of Project Revenues, Expenditures, and

Changes in Fund Balance - Budgetary Basis F-1 a-u Schedule of Project Revenues, Expenditures, Project Balance

and Project Status F-2 Summary Schedule of Project Expenditures-Not Applicable

(ii)

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71

72

73 74

75

76

NIA

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84

85

NIA

86

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89

90 NIA


FINANCIAL SECTION Supplementary Information (continued)

Enterprise Fund: G-1 Combining Statement of Net Position- Not Applicable G-2 Combining Statement of Revenues, Expenses, and

Changes in Fund Position- Not Applicable G-3 Combining Statement of Cash Flows - Not Applicable

Fiduciary Funds: H-1 Combining Statement of Fiduciary Net Position H-2 Combining Statement of Changes in Fiduciary Net Position H-3 Schedule of Cash Receipts and Cash Disbursements -

Student Activity Agency Fund H-4 Schedule of Cash Receipts and Cash Disbursements -

Student Activity Agency Fund H-5 Schedule of Cash Receipts and Cash Disbursements

Payroll Agency Fund

Long-Term Debt: I-1 Schedule of Serial Bonds Payable I-2 Schedule of Obligations Under Capital Leases I-3 Budgetary Comparison Schedule - Debt Service Fund

STATISTICAL SECTION - Other Information (Unaudited)

Financial Trends: J-1 Net Position by Component J-2 Changes in Net Position J-3 Fund Balances, Governmental Funds J-4 Changes in Fund Balances - Governmental Funds J-5 General Fund Other Local Revenues by Source

Revenue Capacity: J-6 Assessed Value and Actual Value of Taxable Property J-7 Property Tax Rates - Direct and Overlapping Governments J-8 Principal Property Tax Payers

J-9 Property Tax Levies and Collections Debt Capacity:

J-10 Ratios of Outstanding Debt by Type J-11 Ratios of Net General Bonded Debt Outstanding J-12 Ratios of Overlapping Governmental Activities Debt J-13 Legal Debt Margin Information

Demographic and Economic Information: J-14 Demographic and Economic Statistics J-15 Principal Employers J-16 Full-Time Equivalent District Employees by Function/Program

(iii)

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NIA NIA

111 112

113

114

115

116 117 118

119 120 121 122 123

124 125 126

127

128 129 130 131

132 133 134

Table of Contents

STATISTICAL SECTION - Other Information (Unaudited) Operating Information:

J-17 Operating Statistics J-18 School Building Information J-19 Schedule of Required Maintenance for School Facilities J-20 Insurance Schedule

SINGLE AUDIT SECTION

K-1 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

K-2 Report on Compliance For Each Major Federal and State Program and Report on Internal Control Over Compliance Required by the OMB Uniform Guidance and New Jersey OMB 15-08

K-3 Schedule A- Schedule of Expenditures of Federal Awards-Supplementary Information

K-4 Schedule B - Schedule of Expenditures of State Financial Assistance-Supplementary Information

K-5 Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance

K-6 Schedule of Findings and Questioned Costs - Part I - Summary of Auditor's Results

K-7 Schedule of Findings and Questioned Costs - Parts II and III -Schedule of Financial Statement Findings and Schedule of Federal Award and State Financial Assistance Findings and Questioned Costs

K-8 Summary Schedule of Prior Year Audit Findings

(iv)

135 136 137 138

139

141

144

145

146

149

151 153

Introductory Section

Robin Tedesco Business Administrator/Board Secretary

December 2, 2016

The Honorable President and Members of the Board of Education Parsippany-Troy Hills Schoo I District County of Morris, New Jersey

Dear Board Members and Constituents:

Parsippany-Troy Hills Township Schools

292 Parsippany Rd, P.O. Box 52 Parsippany, NJ 07054-0052

(973)263-7200 ext. 7209 E-mail: [email protected]

The Comprehensive Annual Financial Report of the Parsippany-Troy Hills School District (the "District") for the fiscal year ended June 30, 2016, is hereby submitted. Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of the Board of Education (the "Board"). To the best of our knowledge and belief, the data presented in this report is accurate in all material respects and is reported in a manner designed to present fairly the basic financial statements and results of operations of the District. All disclosures necessary to enable the reader to gain an understanding of the District's financial activities have been included.

The Comprehensive Annual Financial Rep01t is presented in four sections: introductory, financial, statistical and single audit. The introductory section includes this transmittal letter, (designed to complement Management's Discussion and Analysis and should be read in conjunction with it), the District's organizational chart, a roster of officials and a list of professionals that provide services to the District. The financial section includes the Independent Auditors' Repo1t, the Management's Discussion and Analysis, the basic financial statements and notes providing an overview of the District's financial position and operating results, and supplementary schedules providing detailed budgetary information. The statistical section includes selected economic and demographic information, generally presented on a multi-year basis and is unaudited. The District is required to undergo an annual single audit in conformity with the provisions of the Federal Uniform Guidance and New Jersey's OMB Circular NJOMB 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Information related to this single audit, including the auditors' reports on the internal control over compliance and compliance with applicable Jaws, regulations, contracts and grants along with findings and questioned costs, are included in the single audit section of this report.

1) REPORTING ENTITY AND ITS SERVICES: The Parsippany-Troy Hills School District is an independent reporting entity within the criteria adopted by the Governmental Accounting Standards Board ("GASB") in codification section 2100. All funds and the government-wide financial statements of the District are included in this repo1t. The Parsippany-Troy Hills School District and all its schools constitute the District's reporting entity.

The District provides a full range of educational services appropriate to grade levels Pre K through 12. These include general as well as special education for handicapped children. Considerable emphasis is placed on an ESL program serving appropriate students, while both a basic skills and a gifted and talented program are in place to meet students' needs. The District completed the 2015-2016 fiscal year with an enrollment of 7,014 students, which is an increase of 55 students from the previous year's enrollment.

The following details the changes in the student enrollment of the District over the past five years:

Average Daily Enrollment Fiscal Year Student Enrollment Percent Change

2015-2016 7,014 0.79% 2014-2015 6,959 -0.78% 2013-2014 7,014 -3.52% 2012-2013 7,270 1.00% 2011-2012 7,267 1.10%

2) ECONOMIC CONDITION AND OUTLOOK: The District, along with many other public school districts in the State, faces difficult future economic situations with its major funding sources being property tax revenue and state aid. While expenditures for employee health care, special education costs and contractual salaries continue to increase well above 2%, the District is limited to a 2% tax levy cap. The district's administration is closely monitoring the cost of operations and continues to explore cost efficiencies.

3) MAJOR INITIATIVES: The Parsippany-Troy Hills School District continues a regular and on-going program of curriculum development and revision. The curriculum is directly aligned with the New Jersey Core Curriculum Content Standards and the national Common Core Curriculum Standards with proficiencies designed to enhance student performance and enable each student to achieve growth within each content area. New and continuing instructional materials and programs to meet the requirements of PARCC, the Common Core State Standards, the appropriate New Jersey Core Curriculum Content Standards and the Next Generation Science Standards are being added throughout the District.

In order to provide students with an instructional environment in which they can thrive, the District has developed a program for professional staff development that encourages self-directed professional growth in specifically targeted areas of instruction. The success of any professional development activity in public education can only be measured in terms of the accomplishments of students. It is with this in mind that the District continues its initiatives in differentiating instruction based on the aptitudes and abilities of the students in the classroom while providing students with opportunities to demonstrate, through authentic assessment, their capacities in each content area. The district's strong, collaborative relationship with Montclair State University Network for Educational Renewal affords an opportunity for professional development experiences related to district initiatives and state-wide initiatives.

It is in the cultural, social, and economic diversity of the Parsippany-Troy Hills School District that the District finds its strengths and its challenges. To accommodate individual student needs, programs such as English as a Second Language and support activities in basic skills and assistance to those children with special needs are an ongoing focus. In order to address the cost of special education out-of-district tuition, the school district has developed a plan to return students to the school district when the return is feasible under the requirements of the child's Individual Education Plan (IEP). It is envisioned that this decision will save the District considerable funds in restricting the growth in the out-of-district tuition account and will enhance the instructional opportunities for those children who will now be able to be educated in the community where they live.

4) INTERNAL ACCOUNTING CONTROLS: Management of the District is responsible for establishing and maintaining an internal control system designed to ensure that the assets of the District are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). The internal control environment is designed to provide reasonable, but not absolute, assurance that these

2

objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

As a recipient of federal and state awards, the District also is responsible for ensuring that an adequate internal control system is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control system is also subject to periodic evaluation by the District's management.

As pati of the District's single audit described earlier, tests are made to determine the adequacy of the internal control system, including that portion related to major federal and state award programs, as well as to determine that the District has complied with applicable laws, regulations, contracts and grants.

5) BUDGETARY CONTROLS: In addition to internal accounting controls, the District maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget. Annual appropriated budgets are adopted for the general fund, the special revenue fund and the debt service fund. Project-length budgets are approved for the capital improvements accounted for in the capital projects fund. The final budget amount as amended for the fiscal year is reflected in the financial section.

An encumbrance accounting system is used to record outstanding purchase commitments on a line item basis. Open encumbrances at year-end are either canceled or are included as reappropriations of fund balance in the subsequent year. Those amounts to be reappropriated are reported as assigned fund balance at June 30, 2016.

6) ACCOUNTING SYSTEM AND REPORTS: The District's accounting records reflect generally accepted accounting principles, as promulgated by the GASB. The accounting system of the District is organized on the basis of funds. These funds are explained in "Notes to the Basic Financial Statements," Note I.

7) OTHER INFORMATION: Independent Audit - State statutes require an annual audit by independent certified public accountants or registered municipal accountants. The accounting firm of Wiss & Company, LLP was selected by the Board's audit committee. In addition to meeting the requirements set forth in state statutes, the audit also was designed to meet the requirements of the Uniform Guidance and State OMB Circular Letter OMB 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. The auditors' report on the basic financial statements and required supplementary information is included in the financial section of this report. The auditors' reports related specifically to the single audit are included in the single audit section of this report.

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8) ACKNOWLEDGMENTS: We would like to express our appreciation to the members of the Parsippany-Troy Hills School District Board for their concern in providing fiscal accountability to the citizens and taxpayers of the school district and thereby contributing their full support to the development and maintenance of our financial operation. The preparation of this report could not have been accomplished without the efficient and dedicated services of the financial and accounting staff.

Respectfully submitted,

~ iJ(JtdLSUJ Ro in Tedesco Business Administrator/Board Secretary

4

POLICY PARSIPP ANY-TROY HILLS TOWNSHIP SCHOOL DISTRICT

1110 ORGANIZATIONAL CHART

.. i

t ., . ~·.

ADMINISTRATION p 111 O/page 1 ofl

Organizational Chart

-rlH i i i

' '

5

PARSIPPANY-TROY HILLS SCHOOL DISTRICT ROSTER OF OFFICIALS

Members of the Board of Education

Frank Neglia, President Andrew Choffo, Vice President Timothy Berrios George Blair Joseph Cistaro Alison Cogan Susy Golderer Judy Mayer Fran Orthwein

Other Officers

Scott Rixford LeRoy Seitz, Ed.D. David Corso

Charles Grau

Robin Tedesco Eileen Hoehne Nancy Gigante, Ed.D. Anthony Giordano LyannaRios

JUNE 30, 2016

Term Expires

2018 2017 2017 2017 2016 2016 2018 2018 2016

Title

Superintendent of Schools (July 1, 2015-January 31, 2016) Interim Superintendent of Schools (December 1, 2015-June 30, 2016) Assistant Superintendent for Business/Chief Finance and Operations Officer/Board Secretary (July 1, 2015-May 13, 2016) Interim Business Administrator/Board Secretary (May 13, 2016 -June 30, 2016) Business Administrator/Board Secretary (Effective July 1, 2016) Executive Director of Human Resources/Chief Talent Officer Assistant Superintendent/Chief Academic Officer Executive Director of Pupil Personnel Services Assistant Business Administrator/Board Secretary

6

P ARSIPP ANY-TROY HILLS SCHOOL DISTRICT Independent Auditors and Advisors

June 30, 2016

Attorney

Schenck, Price, Smith & King, LLP 220 Park A venue

P.O. Box 991 Florham Park, New Jersey 07932

Audit Firm

Wiss & Company, LLP 3 54 Eisenhower Parkway

Livingston, New Jersey 07039

Official Depository

Wells Fargo Bank 250 Parsippany Road Parsippany, NJ 07054

State of New Jersey Cash Management Fund Citi Fund Services P.O. Box 182218

Columbus, OH 43218-2218

NJ Asset and Rebate Management Program 821 Alexander Road, Suite 110

Princeton, NJ 08540

Bank of America 135 S LaSalle Street, Suite 1840

Chicago, IL 60603

TD Bank 1006 Astoria Blvd.

Cherry Hill, NJ 08034

7

Financial Section

WI A Partner to Grow With

Honorable President and Members of the Board of Education


Parsippany, New Jersey County of Morris

Report on the Financial Statements


We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Parsippany-Troy Hills School District, County of Morris, New Jersey (the "District"), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in

the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards and requirements require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

14 Penn Plaza, Suite 1010 New York, NY 10122

212.594.8155

354 Eisenhower Parkway, Su ite 1850 Livingston, NJ 07039

973.994.9400

8

5 Ba rt les Corner Road Flemington, NJ 08822

908.782.7300

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective

financial position of the governmental activities, the business-type activities, each major fund and the aggregate

remaining fund information of the District as of June 30, 2016 and the respective changes in financial position,

and, where applicable, cash flows, thereof for the year then ended in accordance with accounting principles

generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that management's discussion

and analysis, the schedule of funding progress - post-employment healthcare benefit plan, the schedule of

employer contributions - post-employment healthcare benefit plan, schedule of the District's proportionate share

of the net pension liability-PERS, schedule of District contributions-PERS, schedule of the State's propottionate

share of the net pension liability associated with the District-TPAF and budgetary comparison information as

identified in the table of contents be presented to supplement the basic financial statements. Such information,

although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board

who considers it to be an essential pa1t of financial reporting for placing the basic financial statements in an

appropriate operational, economic, or historical context. We have applied certain limited procedures to the

required supplementary information in accordance with auditing standards generally accepted in the United States

of America, which consisted of inquiries of management about the methods of preparing the information and

comparing the information for consistency with management's responses to our inquiries, the basic financial

statements, and other knowledge we obtained during our audit of the basic financial statements. We do not

express an opinion or provide any assurance on the information because the limited procedures do not provide us

with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively

comprise the District's basic financial statements. The introductory section, combining and individual fund

financial statements, long-term debt schedules and statistical section, are presented for purposes of additional

analysis and are not a required part of the basic financial statements. The schedules of expenditures of federal

awards and state financial assistance are presented for purposes of additional analysis, as required by Title 2 U.S.

Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles and Audit

Requirements for Federal Awards (Uniform Guidance) and New Jersey OMB Circular 15-08, Single Audit Policy

for Recipients of Federal Grants, State Grants and State Aid, respectively, and are also not a required pa1t of the

basic financial statements.

The combining and individual fund financial statements and long-term debt schedules and the schedules of

expenditures of federal awards and state financial assistance are the responsibility of management and were

derived from and relate directly to the underlying accounting and other records used to prepare the basic financial

statements. Such information has been subjected to the auditing procedures applied in the audit of the basic

financial statements and certain additional procedures, including comparing and reconciling such information

9

directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and long-term debt schedules and the schedules of expenditures of federal awards and state financial assistance are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 2, 2016 on our consideration of the District's internal control over financial reporting and on our tests of its compliance with

certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing

Standards in considering the District's internal control over financial reporting and compliance.

December 2, 2016 Livingston, New Jersey

Scott A. Clelland Licensed Public School Accountant

No. 1049

!Jl_w, of/ ~ WISS & COMP ANY, LLP

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Required Supplementary Information Part I

Management's Discussion and Analysis

Parsippany-Troy Hills School District Management's Discussion and Analysis

Year ended June 30, 2016

As management of the Parsippany-Troy Hills School District, we offer readers of the District's financial statements this narrative discussion, overview, and analysis of the financial activities of the District for the year ended June 30, 2016. We encourage readers to consider the information presented, in conjunction with additional information that we have furnished in our letter of transmittal.

Management's Discussion and Analysis (MD&A) is Required Supplementary Information specified in the Governmental Accounting Standard Board's (GASB) Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments. Certain comparative information between the current fiscal year and the prior fiscal year is presented in the MD&A as required by GASB Statement No. 34.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the District's basic financial statements. The District's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This document also contains required and other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the District's finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the assets, deferred inflows of resources, liabilities and deferred outflows of resources of the District, with the difference between the four reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

The statement of activities presents information showing how the net position of the District changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation and sick leave).

The government-wide financial statements can be found on pages 21 - 22 of this report.

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Fund financial statements. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating government's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the governmentwide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains four individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the general fund, special revenue fund, capital projects fund and debt service fund, all of which are considered to be major funds.

The District adopts an annual appropriated budget for its general fund, special revenue fund and debt service fund. Budgetary comparison statements have been provided as required supplementary information for the general fund and special revenue fund to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 23 - 25 of this report.

Proprietary funds. The District maintains one proprietary fund type, consisting of two enterprise funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The District uses enterprise funds to account for the operations of its food service and adult and community education programs.

The basic enterprise fund financial statements can be found on pages 26 - 28 of this report.

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Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the governmental entity. Fiduciary fimds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the District's own programs. The District uses trust funds to account for the activity of the private-purpose scholarship fund and unemployment compensation trust fund.

The District uses agency funds to account for resources held for student activities and groups, and payroll related liabilities. The basic fiduciary fund financial statements can be found on pages 29- 30 of this report.

Notes to the basic financial statements. The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 31 - 69 of this report.

Required Supplementary Information (RSI). The District is required to present certain supplementary information for its participation in a Post-Employment Healthcare Plan and the Public Employees' Retirement System ("PERS") and Teachers' Pension and Annuity Fund ("TPAF"). Schedules of the District's proportionate share of the PERS net pension liability, contributions made to this program and a schedule of the State's proportionate share of the net pension liability related to TP AF are reported as required supplementary information and can be found on pages 70 - 75 of this report.

Other information. The combining statements refe1Ted to earlier in connection with governmental funds are presented immediately following the RSI. Combining and individual fund statements and schedules can be found on pages 7 6 - 118 of this report.

Financial Highlights

Government-wide Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of a government's financial position. However, in the case of the District, it does not adequately reflect the District's position. Governmental activities liabilities and deferred inflows of resources exceeded assets and deferred outflows of resources by $11,070,907 (net position deficit) for the fiscal year ended June 30, 2016. Governmental activities net position decreased in the current year by $2,144,848.

The following table provides a summary of net position relating to the District's governmental and business-type activities at June 30, 2016 and 2015:

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Parsippany-Troy Hills School District Parsippany, New Jersey

Net Position June 30,

2016 2015

Business- Business-Governmental type Governmental type

Activities Activities Total Activities Activities Total

Current and other assets $ 12,668,864 $ 2,044,862 $ 14,713,726 $ 21,867,605 $ 1,323,242 $ 23,190,847 Capital assets, net 77,078,062 608,450 77,686,512 71,683,864 568,799 72,252,663

Total assets 89,746,926 2,653,312 92,400,238 93,551,469 1,892,041 95,443,510

Deferred outflow of resources: Pension deferrals 9,802,695 9,802,695 4,749,322 4,749,322 Unamortized deferred loss on refunded debt 2,385,142 2,385,142 2,609,716 2,609,716 Total deferred outflows of resources 12,187,837 12,187,837 7,359,038 7,359,038

Current liabilities 10,581,131 501,709 11,082,840 10,147,028 204,258 10,351,286 Net pension liability 49,572,491 49.572,491 40,987,927 40,987,927 Long-term liabilities

outstanding 52,055,018 52,055,018 56,258,953 56,258,953 Total liabilities 112,208,640 501,709 112,710,349 I 07,393,908 204,258 107,598,166

Deferred inflow of resources Pension deferrals 797,030 797,030 2,442,658 2,442,658

Net position:

Net investment in capital assets 22,246,363 608,450 22,854,813 18,025, 158 568,799 18,593,957

Restricted 5,164,320 5,164,320 10,500,851 10,500,851 Unrestricted (deficit) (38,481,5902 1,543,153 (36,938,4372 (37,452,0682 1,118,984 (36,333,0842

Total net position (deficit) $ (11,070,907) $ 2,151,603 $ (8,919,3042 $ (8,926,0592 $ 1,687,783 $ (7,238,276)

Governmental activities

The decrease in current and other assets is mainly attributable to the decrease in cash held with fiscal agents which is a result of proceeds received from the Energy Savings Improvement Plan (ESIP) in the prior year being spent in the current year.

Capital assets, net increased due to the additions to building and building improvements relating primarily to the ESIP and other lease funded capitalized expenses.

The increase in the deferred outflows ofresources is the result of the recording of the current year loss on the refunding of debt offset by the amortization of both the current and prior year's losses and the pension deferral component related to GASBs 68 and 71.

Current liabilities increased due to an increase in the current portion of obligations offset by a decrease in accounts payable, accrued expenses and unearned revenue.

The net pension liability recorded as of June 30, 2016 is the result of the prov1s10ns of Governmental Accounting Standards Board Statement No. 68, Accounting and Financial

14

Reporting for Pensions (GASE 68) and Governmental Accounting Standards Board Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment to GASE Statement No. 68 (GASE 71).

Long-term liabilities decreased mainly due to the scheduled repayment of serial bonds payable and capital leases.

The largest pmiion of the District's net position is its net investment in capital assets. Restricted net position includes those that are subject to restrictions (e.g., for capital projects capital reserve, emergency reserve and excess fund balance in the general fund). Restricted net position decreased during the year ended June 30, 2016 resulting from a decrease in net position restricted for capital projects.

Unrestricted net position decreased as compared to the prior year, mainly as a result of the current year provisions of GASBs 68 and 71.

Business-type activities

The business-type activity net position for the year ended June 30, 2016 of $2, 151,603 increased from the prior year mainly due to the positive operating results in the 2016 fiscal year of its Adult and Community Education Program.

Changes in Net Position

Government-wide activities. The key elements of the District's changes in net position for the years ended June 30, 2016 and 2015 follow. The following table provides a summary of changes in net position relating to the District's governmental and business-type activities at June 30, 2016 and 2015:

15

Parsippany-Troy Hills School District Parsippany, New Jersey Changes in Net Position

Year ended June 30, 2016 2015

Business- Business-Governmental type Governmental type

Activities Activities Total Activities Activities Total Revenues:

Program revenues: Charges for services $ 281,529 $ 4,357,310 $ 4,638,839 $ 216,116 $ 4,650,853 $ 4,866,969 Operating grants and contributions 2,788,827 739,830 3,528,657 2, 191,240 698,415 2,889,655

Capital grants and contributions 349,442 349,442 General revenues:

Property taxes 128,386,813 128,386,813 124,936,750 124,936,750 Federal and state aid not restricted

to specific purposes 37,599,051 37,599,051 31,151,966 31,151,966 Miscellaneous 263,932 263,932 106,019 106,019

Total revenues 169,320, 152 5,097,140 174,417,292 158,951,533 5,349,268 164,300,801

Expenses: Instructional 92,828,476 92,828,476 84,285,192 84,285, 192 Support services 77,179,912 4,633,320 81,813,232 69,270,921 4,489,723 73,760,644 Charter school 338,426 338,426 343,519 343,519 Special schools 1,666 1,666 Interest on long-term debt 1,118,186 1,118,186 2,048,389 2,048,389

Total expenses 171,465,000 4,633,320 176,098,320 155, 949,687 4,489,723 160,439,410

Change in net position (2, 144,848) 463,820 (1,681,028) 3,001,846 859,545 3,861,391

Net position (deficit)- beginning of year (8,926,059) 1,687,783 (7,238,276) (! 1,927,905) 828,238 (11,099,667)

Net position (deficit)- end of year =$==(=11=,0=7=0=,9=07=)=$=2=, 1=5=1,=60=3=$====(8=,9=1=9=,3=04=)=$===(=8,=92=6=,0=5=9)==$===1,6=8=7=, 7=83==$====(7=,2=3=8=,2=76=')=

Governmental activities

Property tax revenues increased due to an increase in the school tax levy.

The increase in unrestricted federal and state aid is mainly the result of receiving additional state aid in 2016 as compared to the previous year, mainly attributable to the on-behalf pension benefits paid for by the State on behalf of the District.

Business-type activities

Overall, the net position of the business-type activities increased by $463,820 due to positive 2016 operating results. The District continued to utilize the services of an outside food service management company instead of operating the food service operations in-house.

16

Financial Analysis of the District's Funds

As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the District's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District's financing requirements.

As demonstrated by the various statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management. The following schedule presents a summary of the General Fund, Special Revenue Fund and Debt Service Fund revenues for the fiscal year ended June 30, 2016, and the increases in relation to prior year. The Capital Projects Fund has been excluded as amounts vary substantially from year to year.

Percent Increase Percent of Revenue Amount of Total from 2015 Increase

Local sources $128,956,293 84.74% $ 3,658,914 2.92% State sources 20,547,750 13.50 2,418,134 13.34 Federal sources 2,678,852 1.76 577,269 27.47 Total $152,182,895 100.00% $ 6,654,317 4.57%

The increase in local sources is mainly attributable to the increase in the local tax levy.

The increase in state sources is mainly attributable to an increase in state aid during the current year as compared with the prior year, mainly from the on-behalf pension benefits paid by the State on behalf of the District.

The increase is federal sources is due to increases in IDEA and Title I, Title II and Title III in the current year compared to prior year.

The following schedule presents a summary of General Fund, Special Revenue Fund and Debt Service Fund expenditures for the fiscal year ended June 30, 2016, and the increases and decreases related to the prior year. The Capital Projects Fund has been excluded as amounts vary substantially from year to year.

Increase Percent of Percent (Decrease) Increase

Expenditures Amount of Total from 2015 (Decrease)

Current expenditures: Instruction $ 56,692,895 35.54% $ 3,423,768 6.43% Support services 90,123,029 56.49 7,374,110 8.91

Capital outlay 9,018,141 5.65 1,620,544 21.91 Charter schools 338,426 0.21 (5,093) (1.48) Special schools (1,666) (100.00) Debt service:

Principal 1,800,000 1.13 (70,000) (3.74) Interest 1,557,778 0.98 50,659 3.36

Cost of issuance {146,3002 (100.00) Total $159,530,269 100.0% $ 12,246,022 8.31 %

17

The increase in instruction and undistributed is mainly attributable to the increase in salaries and an increase in the on-behalf post-retirement benefit contributions paid by the State on behalf of the District offset by a reduction of health benefit expenditures due to the increased contributions from employees related to Chapter 78.

The increase in capital outlay is attributable to the District's additional capital leases which were entered into in fiscal year 2016.

General Fund Budgetary Highlights

Budgetary transfers were made between budgetary line items and approved by the Board for various reasons including:

• Total instruction - regular programs - an increase of $842,819 is a result of having to reorganize and hire more staff as a result of the change in the Middle School schedule.

• Total special education - resource room/center - a decrease of $484,218 is due to the reallocation of teacher assignments.

• Total undistributed instruction - an increase of $355,669 is due to students who attend out of district schools moving into the district after the budget was struck.

• Total other support service - students - extra services - an increase of $581,681 is due to an increase in one-to-one paraprofessionals.

• Total undistributed instruction security - a decrease of $337,956 is due to the Director of Security and elementary school security guard positions not being filled.

• Total equipment, facilities and construction services - an increase of $933,891 is due to the purchase of additional technology and maintenance equipment.

There were also certain variances between the final budget and the actual expenditures that are explained below:

• Total instruction - regular programs - a positive variance of $360,206 is the result of cutting back on general supplies and purchasing of text books due to budget constraints.

• Total undistributed expenditures - custodial services - a positive variance of $454,872 is the result of natural gas and electrical costs which was less than anticipated.

18

Capital Assets

At the end of the fiscal years ended June 30, 2016 and 2015, the District had $77,686,512 and $72,252,663, respectively, invested in land, construction in progress, land improvements, building and building improvements and machinery and equipment, net of accumulated depreciation or amortization.

Capital Assets (Net of Depreciation) Governmental Activities Business-type Activities

2016 2015 2016 2015

Land $ 3,956,475 $ 3,956,475 Land improvements 3,616,097 809,517 Construction in Progress 181,320 12,263,132 Building and building

improvements 65,508,724 50,588,026 Machinery and equipment 3,815,446 4,066,714 $ 608,450 $ 568,799 Total $ 77,078,062 $ 71,683,864 $ 608,450 $ 568,799

The increase in land improvements, building and building improvements and machinery and equipment is mainly due to additions exceeding depreciation expense during the 2016 fiscal year. The decrease in construction in progress is due to the project completion relating to the ESIP and other lease activity.

For more detailed information, please refer to Note 4 to the basic financial statements.

Debt Administration

AtJune 30, 2016, the District had $58,913,510 of outstanding long-term liabilities. Of this amount, $1,057,271 is for compensated absences; $38,222,807 of serial bonds including an unamortized premium on bonds of $4,752,807; $639,398 is for other post-employment retirement benefits payable; and $18,994,034 is for capital leases.

For more detailed information, refer to Note 5 of the basic financial statements.

Economic Factors and Next Year's Budget

The fiscal outlook in the near term is a concern for most school districts and municipalities, including this one. Top-down changes in funding will require flexibility and very careful planning at the local level. With the continued uncertainty from the State of New Jersey's budget crisis, the adoption of a budget that maintains educational services at a higher level becomes more and more difficult. The District will continue to employ prudent and responsible fiscal practices to maintain its sound financial condition.

At the time these financial statements were prepared and audited, the District was aware of several existing circumstances that could significantly affect the financial health in the future:

19

1. The District entered into an ESIP during the 2014 fiscal year and expects to receive cost savings as the program is implemented.

2. The Board continues its focus on technological upgrades and advancements in instructional opportunities for students and staff. There are increased budgetary allocations though lease purchase to upgrade computers and technology on all educational levels in the District.

The District is infusing technological instructional tools by providing I pads to all incoming freshmen.

3. The District achieved a three year settlement with the teachers' union (PTHEA). The District is currently in negotiations with the administrators' union (APSA), the paraprofessionals' union (PTHESA) and the maintenance, custodial and bus drivers' union (International Association of Industrial Workers-Local 32). The collective bargaining agreement for APSA expired on June 30, 2015 and the collective bargaining agreements

for PTHESA and Local 32 expired on June 30, 2016. At the time these financial statements were being prepared it was difficult to estimate the outcome of these negotiations or when they may be achieved.

4. The District continues to maintain its facilities. In the 2015-2016 school year, the district partially replaced two elementary school roofs, added additional security equipment at all

schools and turfed the athletic field at each high school.

All of the above factors were considered in preparing the District's 2016-17 fiscal year budget.

Requests for Information

This financial report is designed to provide a general overview of the Parsippany-Troy Hills School District finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Board of Education Office, PO Box 52, Parsippany, New Jersey 07054.

20

Basic Financial Statements

Government-wide Financial Statements

The government-wide financial statements provide a financial overview of the District's operations. These financial statements present the financial position and operating results of all governmental activities and business-type activities as of and for the year ended June 30, 2016.

A-1 Parsippany-Troy Hills School District

Statement of Net Position

June 30, 2016

Governmental Business-type Activities Activities Total

Assets Cash and cash equivalents $ 8,135,700 $ 1,928,286 $ 10,063,986 Accounts receivable 2,674,486 97,030 2,771,516 Inventories 19,546 19,546 Restricted assets:

Cash held with fiscal agent 5,199 5,199 Cash and cash equivalents 1,853,479 1,853,479

Capital assets, non-depreciable 4,137,795 4,137,795 Capital assets, depreciable, net 72,940,267 608,450 73,548,717 Total assets 89,746,926 2,653,312 92,400,238

Deferred outflows of resources Pension deferrals 9,802,695 9,802,695 Unamortized deferred loss on refunded debt 2,385,142 2,385,142 Total deferred outflows of resources 12,187,837 12,187,837

Liabilities Accounts payable and accrued liabilities 2,750,627 389,788 3,140,415 Accrued interest payable 789,679 789,679 Payable to state government 37,215 37 ,215 Unearned revenue 145,118 111,921 257,039 Net pension liability 49,572,491 49,572,491 Current portion of long-term obligations 6,858,492 6,858,492 Noncurrent portion of long-term obligations 52,055,018 52,055,018 Total liabilities 112,208,640 501,709 112,710,349

Deferred inflow of resources Pension deferrals 797,030 797,030

Net position Net investment in capital assets 22,246,363 608,450 22,854,813 Restricted for:

Capital projects 336,192 336,192 Other purposes 4,828,128 4,828,128

Unrestricted (deficit) (3 8,481,590) 153 (36,938,437)

Total net position $ (11,070,907) $ 2, 151,603 $ (8,919,304)

See accompanying notes to the basic financial statements. 21

A-2 Parsippany-Troy Hills School District

Statement of Activities


Net (Expense) Revenue and Program Revenues Changes in Net Position

Operating Charges for Grants and Governmental Business-type

Functions/Programs Ex[!enses Services Contributions Activities Activities Total

Governmental activities Instruction

Regular $ 67,327,824 $ (67,327,824) $ (67,327,824)

Special education 17,544,548 $ 1,728,038 (15,816,510) (15,816,510)

Other instruction 4,345,044 (4,345,044) (4,345,044)

School sponsored instruction 3,611,060 (3,611,060) (3,611,060)

Support services: Tuition 9,723,979 $ 281,529 1,060,789 (8,381,661) (8,381,661)

Student activities 21,843,077 (21,843,077) (21,843,077)

Instruction services 8,330,814 (8,330,814) (8,330,814)

General administration services 1,365,393 (1,365,393) (1,365,393)

School administration services 7,300,094 (7,300,094) (7,300,094)

Central services 2,637,523 (2,637,523) (2,637,523) Admin infomrntion technology 2,417,212 (2,417,212) (2,417,212)

Plant operations and maintenance 15,682,039 (15,682,039) (15,682,039)

Pupil transportation 7,879,781 (7,879, 781) (7,879,781) Interest and other charges on long-term debt 1,118,186 (1,118,186) (1,118,186)

Charter schools 338,426 (338,426) (338,426)

Total governmental activities 171,465,000 281,529 2,788,827 (168,394,644) (168,394,644)

Business-type activities Food service 2,529,796 1,748,269 739,830 $ ( 41,697) ( 41,697)

Adult and community education 2,103,524 2,609,041 505,517 505,517

Total business-type activities 4,633,320 4,357,310 739,830 463,820 463,820

Total primary government $ 176,098,320 $ 4,638,839 $ 3,528,657 (168,394,644) 463,820 (167,930,824)

General revenues Property taxes, levied for general purposes 125,598,737 125,598,737 Property taxes, levied for debt service 2,788,077 2,788,077 State aid not restricted 37,510,404 37,510,404

Federal aid not restricted 88,647 88,647 Investment earnings 2,990 2,990 Miscellaneous income 260,941 260,941

Total general revenues 166,249,796 166,249,796

Change in net position (2, 144,848) 463,820 (1,681,028)

Net position-beginning (deficit) (8,926,059) 1,687,783 (7,238,276) Net position-ending (deficit) $ {11,070,9071 $ 2,151,603 $ (8,919,3041


Fund Financial Statements -

Governmental Funds

Assets Cash and cash equivalents Accounts receivable:

State Federal Interfund Other

Restricted assets: Cash held with fiscal agents Cash and cash equivalents

Total assets

Liabilities and fund balances Liabilities:

Accounts payable Intergovernmental payables:

State Interfunds payable Unearned revenue

Total liabilities

Fund balances: Restricted for:

Capital reserve Capital reserve - designated for

subsequent year expenditures

Emergency reserve Capital projects Debt service Excess surplus-prior year

Assigned to: Designated for subsequent year

expenditures Designated for subsequent year

expenditures - SEMI Other purposes

Unassigned Total fund balances

Total liabilities and fund balances


Governmental Funds

Balance Sheet

June 30, 2016

Mn'or Funds

General Fund

Special Revenue

Fund

Capital Projects

Fund

Debt Service Fund

8,098,391

1,124,812 12,751

863,853 100,814

5,199 1,853,479

12,059,299

921,196

57,789 978,985

590,271

1,000,000 263,208

2,974,649

3,600,000

12,751 189,641

2,449,794 I 1,080,314 12 059 299

679,065

I I 1,520

37,215 443,001

87,329 679,065

679 065

Amounts reported for govemmenlal acth•ilies in the statement of net position (A-1) are different because:

757,044

757,044

420,852

420,852

336, I 92

336,192

757 044

Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. The cost of the assets is $1I1,013,844 and the accumulated depreciation is $33,935,782.

Accrued interest on long-term debt is not due and payable in the current period and therefore is not reported as a liability in the funds.

Deferred pension costs in governmental activities are not financial resources and are therefore not reported in the funds.

Losses arising from the issuance of refunding bonds that are a result of the difference in the carrying value of the refunded bonds and the new bonds are deferred and amortized over the life of the new bonds.

Net pension liability is not due and payable in the current period and therefore the liability and related deferred outflows and inflows, are not reported in the funds.

Accrued pension contributions for the June 30, 2016 plan year end are not paid with current economic resources and are therefore not reported as a liability in the funds, but are included in accounts payable in the government-wide Statement of Net Position.

37,309

37,309

37,309

37 309

Long-term liabilities, including bonds payable, capital leases, premiums on bonds, other post employment benefits payable liabilities and compensated absences are not due and payable in the current period and therefore are not reported as liabilities in the funds.

Net position (deficit) of governmental activities

See accompanying notes to the basic financial statements.

B-1

Total Governmentnl

Funds

8, 135,700

1,881 ,856 691,816 863,853 100,814

5,199 1,853,479

13,532, 717

1,032,716

37,215 863,853 145,118

2,078,902

590,27 I

1,000,000 263,208 336, I 92

37,309 2,974,649

3,600,000

12,751 189,641

2,449,794

I 1,453,815

77,078,062

(789,679)

9,005,665

2,385,142

( 49,572,491)

(J,717,911)

(58,913,510)

(I I ,070,907)

23

B-2


Governmental Funds

Statement of Revenues, Expenditures and Changes in Fund Balances


Major Funds

Special Capital Debt Total General Revenue Projects Service Governmental

Fund Fund Fund Fund Funds Revenues:

Local sources: Local tax levy $ 125,598,737 $ 2,788,077 $ 128,386,814 Tuition from individuals 281,529 281,529 Interest 2,438 $ 552 2,990 Miscellaneous 260,941 $ 24,571 285,512

Total local sources 126,143,645 24,571 552 2,788,077 128,956,845

State sources 19,805,070 174,051 568,629 20,547,750 Federal sources 88,647 2,590,205 2,678,852

Total revenues 146,037,362 2,788,827 552 3,356,706 152,183,447

Expenditures: Current:

Regular instruction 40,039,248 40,039,248 Special education instruction 9,171,322 1,728,038 10,899,360 Other instruction 3,412,509 3,412,509 School sponsored instruction 2,341,778 2,341,778

Support services & undist costs: Tuition 8,659,173 1,060,789 9,719,962 Student services 12,718,187 12,718,187 Instruction services 6,298,685 6,298,685 General administration 1,091,645 1,091,645 School administration 4,410,527 4,410,527 Central services 1,631,073 1,631,073 Admin info technology 1,678,728 1,678,728 Plant oper. & maintenance 11,233,188 11,233,188 Pupil transportation 6,659,821 6,659,821 Unallocated benefits 34,681,213 34,681,213

Capital outlay 9,018,141 2,773,307 11,791,448 Charter school 338,426 338,426 Debt service:

Principal 1,800,000 1,800,000 Interest 1,557,778 1,557,778

Total expenditures 153,383,664 2,788,827 2,773,307 3,357,778 162,303,576 (Deficiency) ofrevenues

(under) expenditures (7 ,346,302) (2,772,755) (1,072) (10,120,129)

Other financing sources (uses): Capital leases (non-budgeted) 1,000,000 1,000,000 Other capital leases (non-budgeted) 1,370,893 1,370,893 Transfers in 552 552 Transfers out (552l {552l

Total other financing sources (uses) 2,370,893 (552) 552 2,370,893

Net change in fund balances ( 4,975,409) (2, 773,307) (520) (7,749,236)

Fund balances, July 1 16,055,723 3,109,499 37,829 19,203,051 Fund balances, June 30 $ 11 080,314 $ 336 192 $ 37 309 $ 11453 815

The reconciliation of the fund balances of governmental funds to the net position of governmental activities in the statement of activities is presented in an accompanying schedule (B-3).


Parsippany-Troy Hills School District Governmental Funds

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Total net change in fund balances - governmental funds (from B-2)

Amounts reported for governmental activities in the statement of activities (A-2) are different because:

Capital outlays are reported in governmental funds as expenditures.


However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital asset additions exceeded depreciation expense in the period.

Capital additions Depreciation expense

In the statement of activities, interest on long-term debt/capital leases is accrued, regardless of when due. In the governmental funds, interest is reported when due. The amount presented is the change from prior year.

Loss on disposition of assets

Governmental funds report the effect of refunding transactions when the debt is first issued, whereas the amounts are deferred and amortized in the statement of activities. This represents the current year amortization related to the deferred interest costs.

Repayments of bond principal are expenditures in the governmental funds, but the payment reduces long-term liabilities in the siatement of net position and is not reported in the statement of activities.

Governmental funds report the effect of premiums on bonds when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items.

Other Postemployment Benefit (OPEB) payable is reported in the statement of net position but does not require the use of current financial resources and therefore is not reported in the Governmental Funds.

Capital Leases entered into by the district are other financing sources in the Governmental Funds, but the acquisition increases long-term liabilities in the statement of net position and is not reported in the the statement of activities.

Repayment of capital leases is an expenditure in the Governmental Funds, but the repayment reduces long-term liabilities in the statement of net position and is not reported in the statement of activities.

In the statement of activities, certain operating expenses, e.g., compensated absences (vacations) are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are reported in the amount of financial resources used (paid).

Certain expenses reported in the statement of activities do not require the use of current resources and therefore are not reported as expenditures in governmental funds:

Pension expense

Change in net position of governmental activities (A-2)


$ 9,022,650 {3,582, I 05)

$

$

B-3

(7,749,236)

5,440,545

255,512

(46,347)

(224,573)

1,800,000

408,653

31,239

(2,559,835)

2,176,069

28,031

(1,704,906)

(2, 144,848)

25

Proprietary Fund

B-4

Parsippany-Troy Hills School District Proprietary Fund

Combining Statements of Net Position

June 30, 2016

Major Enterprise Funds

Adult and Food Community

Service Education Total Assets Current assets:

Cash and cash equivalents $ 217,956 $ 1,710,330 $ 1,928,286 Accounts receivable:

State 3,724 3,724 Federal 93,083 93,083 Other 223 223

Inventories 19,546 19,546 Total current assets 334,532 1,710,330 2,044,862

Non-current assets: Capital assets:

Equipment 1,015,878 1,015,878 Accumulated depreciation (407,428) (407,428)

Total capital assets, net 608,450 608,450 Total assets 942,982 1,710,330 2,653,312

Liabilities Current liabilities:

Accounts payable 157,294 232,494 389,788 Unearned revenue 2,850 109,071 111,921

Total current liabilities 160,144 341,565 501,709

Net position Net investment in capital assets 608,450 608,450 Unrestricted 174,388 1,368,765 1,543,153 Total net position $ 782 838 $ 1,368,765 $ 2,151,603



Combining Statements of Revenues, Expenses and Changes in Net Position


Major Enterprise Funds

Adult and

Community

Food Service Education Operating revenues:

Local sources: Daily food sales-reimbursable programs $ 1,562,457 Special event income 185,812 Adult school income $ 2,609,041

Total operating revenues 1,748,269 2,609,041

Operating expenses: Cost of sales - reimbursable 975,074 Cost of sales - non-program 213,235 Salaries and wages 740,877 543,901 Employee benefits 193,699 39,456 Supplies, insurance & other costs 246,774 1,498,179 Depreciation expense 57,640 Management fee 96,833 Miscellaneous expense 5,664 21,988

Total operating expenses 2,529,796 2,103,524

Operating (loss) income (781,527) 505,517

Nonoperating revenues: State sources:

State school lunch program 20,825 Federal sources:

National school lunch program 493,198 National school breakfast program 22,171 Food donation program 203,636

Total nonoperating revenues 739,830

Change in net position (41,697) 505,517

Total net position-beginning 824,535 863,248

Total net position-ending $ 782,838 $ 1,368,765


B-5

Total

$ 1,562,457 185,812

2,609,041 4,357,310

975,074 213,235

1,284,778 233,155

1,744,953 57,640 96,833 27,652

4,633,320

(276,010)

20,825

493,198 22,171

203,636 739,830

463,820

1,687,783

$ 2,151,603

27


Combining Statements of Cash Flows


Major Enterprise Funds Adult and

Food Community Service Education

Cash flows from operating activities Receipts from customers $ 1,765,535 $ 2,541,696 Payments for salaries and wages (740,877) (543,901) Payments for employee benefits (193,699) (39,456) Payments to suppliers (1,379,685) (1,294,198) Net cash (used for) provided by operating activities (548,7262 664,141

Cash flows from noncapital financing activities State school lunch program 22,042 National school breakfast program 19,725 National school lunch program 505,450 Food donation program 192,925 Cash paid to other funds (101,037) Net cash provided by noncapital financing activities 639,105

Cash flows from capital and related financing activities Acquisition of capital assets (97,291) Net cash used for capital and related financing activities (97,291)

Net (decrease) increase in cash and cash equivalents (6,912) 664,141

Cash and cash equivalents, beginning of year 224,868 1,046,189

Cash and cash equivalents, end of year $ 217 956 $ 1710330

Reconciliation of operating (loss) income to net cash (used for) provided by operating activities

Operating (loss) income $ (781,527) $ 505,517 Adjustments to reconcile operating (loss) income to net cash

(used for) provided by operating activities: Depreciation 57,640 Change in assets and liabilities:

Decrease in other accounts receivable 17,265 Decrease in inventory 8,357 Increase in accounts payable 149,539 225,969 (Decrease) in unearned revenue (67,345)

Net cash used in operating activities $ (548,726) $ 664,141

Non cash 11011capital ji11a11ci11g activities: The District received $192,925 of food commodities from the U.S. Department of Agriculture for the year ended June 30, 2016.


B-6

Totals

$ 4,307,231 (1,284,778)

(233,155)

22,042 19,725

505,450 192,925

(101,037) 639,105

(97,291) (97,291)

657,229

1,271,057

$ 1,928,286

$ (276,010)

57,640

17,265 8,357

375,508 (67,345)

$ 115,415

28

Fiduciary Funds

Assets Cash and cash equivalents

Total assets

Liabilities Accounts payable Due to student groups

Parsippany-Troy Hills School District Fiduciary Funds

Statement of Fiduciary Net Position

June 30, 2016

Private Unemployment Purpose Compensation Scholarship

Trust Fund Trust Funds

$ 1,692,722 $ 59,192

1,692,722 59,192

5,572

Payroll deductions and withholdings payable Summer escrow payable

Total liabilities 5,572

Net position: Held in trust for:

Unemployment compensation claims 1,687,150 Scholarships 59,192

Total net position $ 1,687,150 $ 59,192


B-7

Agency Fund

$ 3,493,653

$ 3,493,653

$ 403,164 715,428

2,375,061

$ 3,493,653

29

Parsippany-Troy Hills School District Fiduciary Funds

Statement of Changes in Fiduciary Net Position


Unemployment Compensation

Trust Fund

Additions: Employee contributions $ 179,996 Donations and interest

Total Additions 179,996

Deductions: Unemployment compensation claims 139,249 Scholarships awarded

Total Deductions 139,249

Change in net position 40,747

Net position, beginning 1,646,403

Net position, ending $ 1,687,150


B-8

Private Purpose Scholarship Trust Funds

$ 28,060

28,060

30,900

30,900

(2,840)

62,032

$ 59,192

30


Notes to the Basic Financial Statements


1. Summary of Significant Accounting Policies

The financial statements of the Parsippany-Troy Hills School District (the "District") have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. The more significant of the District's accounting policies are described below.

A. Reporting Entity

The financial reporting entity consists of a) the primary government, b) organizations for which the primary government is financially accountable, and c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

The District is an instrumentality of the State of New Jersey, established to function as an educational institution. The Board of Education ("Board") consists of elected officials and is responsible for the fiscal control of the District. A superintendent is appointed by the Board and is responsible for the administrative control of the District.

The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it.

The District, as the primary government for financial reporting entity purposes, has oversight responsibility and control over all activities related to the Parsippany-Troy Hills School District in Parsippany, New Jersey. The District receives funding from local, state, and federal government sources and must comply with the requirements of these funding source entities.

The primary criterion for including activities within the District's reporting entity, as set forth in Section 2100 of the GASB Codification of Governmental Accounting and Financial Reporting Standards is whether:

31


Notes to the Basic Financial Statements (continued)


1. Summary of Significant Accounting Policies (continued)

A. Reporting Entity (continued)

• the organization is legally separate (can sue or be sued on their own name);

• the District holds the corporate powers of the organization;

• the District appoints a voting majority of the organization's board;

• the District is able to impose its will on the organization;

• the organization has the potential to impose a financial benefit/burden on the District; or

• there is a fiscal dependency by the organization on the District

Based on the aforementioned criteria, the District does not have any component units.

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which n01mally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, enterprise funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual proprietary funds are reported as separate columns in the fund financial statements. The New Jersey Department of Education requires all funds be rep01ied as major to promote consistency among school districts in the State of New Jersey.

32





C. Measurement Focus, Basis of Accounting and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Prope1iy taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within sixty days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, capital leases, pension liabilities, and other post-employment benefits, are recorded only when payment is due.

Property taxes, interest, and state equalization monies associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year. All other revenue items are considered measurable and available when the District receives cash.

The District has rep01ied the following major governmental funds:

General Fund: The general fund is the general operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Included are ce1iain expenditures for vehicles and movable instructional or non-instructional equipment, which are classified in the capital outlay sub-fund.

Special Revenue Fund: The District maintains one special revenue fund, which includes the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes, other than debt service or capital projects.

Capital Projects Fund: The capital projects fund is used to account for and report financial resources that are restricted, committed, or assigned to an expenditure for capital outlays, including the acquisition or construction of major capital facilities and other capital assets (other than those financed by proprietary funds). The financial resources are derived from an Energy Savings Improvement Program (ESIP) capital lease and state aid, and temporary notes or bond proceeds that

33





C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)

are specifically authorized by the voters as a separate question on the ballot either during the annual election or at a special election.

Debt Service Fund: The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned to an expenditure for the principal and interest on long-term general obligation debt of governmental funds.

The District reports the following major proprietary funds:

Food Service Enterprise Fund: The food service enterprise fund accounts for all revenues and expenses pertaining to cafeteria operations. The food service fund is utilized to account for operations that are financed and operated in a manner similar to private business enterprises. The stated intent is that the cost (i.e., expenses including depreciation and indirect costs) of providing goods or services to the students on a continuing basis are financed or recovered primarily through user charges.

Adult and Community Education Enterprise Fund: The adult and community education enterprise fund accounts for all revenues and expenses pertaining to recreational, academic and vocational curriculum offered to residents. The adult and community education enterprise fund is utilized to account for operations that are financed and operated in a manner similar to private business enterprises. The stated intent is that the cost (i.e., expenses including depreciation and indirect costs) of providing goods or services to the students on a continuing basis are financed or recovered primarily through user charges.

Additionally, the District reports the following fund types:

Fiduciary funds of the District include the unemployment compensation and private purpose scholarship trnst funds and agency funds. Agency funds are purely custodial (assets equal liabilities) and thus do not involve measurements of results of operations. The following is a description of the fiduciary funds of the District.

Trust and Agency Funds: The trnst and agency funds are used to account for assets held by the District on behalf of outside parties, including other governments, or on behalf of other funds within the District.

Trust Funds: These unemployment compensation and private purpose scholarship funds are accounted for in essentially the same manner as governmental funds. The unemployment compensation fund is used to account for contributions from employees and interest earned on the balance as well as payments to the State for reimbursement of unemployment claims. The private purpose scholarship fund is utilized to provide scholarships to students and to account for the related transactions.

34





C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)

Agency Funds (Payroll and Student Activity Fund): Agency funds are used to account for the assets that the District holds on behalf of others as their agent. Agency funds are custodial in nature and do not involve measurement of results of operations.

As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements.

Amounts reported as program revenues include 1) fees charged to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Enterprise funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the District enterprise funds are charges for sales of food and tuition. Operating expenses for the enterprise funds include the cost of sales, costs of providing education programs, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are repo1ied as nonoperating revenues and expenses.

The District reports unearned revenue on its balance sheet and statements of net position. Unearned revenue also arises when resources are received by the District before it has legal claim to them, as when federal assistance is received prior to the incurrence of qualifying expenditures. In subsequent periods, when the District has a legal claim to the resources, the liability for unearned revenue is removed from the balance sheet and statements of net position and revenue is recognized.

Ad Valorem (Property) taxes are susceptible to accrual as, under New Jersey State Statute, a municipality is required to remit to the school district the entire balance of taxes in the amount certified prior to the end of the school year. The District records the entire approved tax levy as revenue (accrued) at the start of the fiscal year, since the revenue is both measurable and available. The District is entitled to receive moneys under the established payment schedule and the unpaid amount is considered to be an "accounts receivable." The County Board of Taxation is responsible for the assessment of prope1ties and the Township Tax Collector is responsible for collection of taxes. Assessments are certified and taxes are levied on January 1; taxes are due February 1, May 1, August 1 and November 1. Unpaid taxes are considered delinquent the following January 1 and are then subject to lien.

35





D. Budgets/Budgetary Control

Annual appropriated budgets are prepared in the spring of each year for the general, special revenue and debt service funds. The budgets are submitted to the county office for review and approval and are approved by the Board of Education members. Budgets are prepared using the modified accrual basis of accounting and the special revenue fund uses a non-GAAP budget (budgetary basis). The legal level of budgetary control is established at line item accounts within each fund. Line item accounts are defined as the lowest (most specific) level of detail as established pursuant to the minimum chart of accounts referred in NJ.AC. 6A:23. The over expenditure in the general fund is due to the inclusion of the non-budgeted on behalf payments made by the State of New Jersey as Distiict expenditures. These amounts are offset by related revenues and as such do not represent budgetary over expenditures. All budget amendments must be approved by School Board resolution. Budget amendments were made during the year ended June 30, 2016 and were not significant.

Formal budgetary integration into the accounting system is employed as a management control device during the year. For governmental funds, there are no substantial differences between the budgetary basis of accounting and accounting principles generally accepted in the United States with the exception of the legally mandated revenue recognition of the last state aid payments for budgetary purposes only and the special revenue fund as noted below. Encumbrance accounting is also employed as an extension of formal budgetary integration in the governmental fund types. Open encumbrances at year-end are reappropiiated in the subsequent year's budget. Unencumbered appropriations lapse at fiscal year-end.

The accounting records of the special revenue fund are maintained on the grant accounting budgetary basis. The grant accounting budgetary basis differs from GAAP in that the grant accounting budgetary basis recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. Sufficient supplemental records are maintained to allow for the presentation of GAAP basis financial rep01is.

E. Cash, Cash Equivalents and Investments

Cash and cash equivalents include petty cash, change funds, amounts on deposit and short-term investments with original maturities of three months or less.

Investments are stated at fair value in accordance with Governmental Accounting Standards Board (GASB) Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools and Statement No. 72, Fair Value Measurement and Application. The Board classifies certificates of deposit, which have original matuiity dates of more than three months but less than twelve months from the date of purchase, as investments and are stated at cost. All other investments are stated at fair value.

36





F. Interfund Receivables/Payables

Interfund receivables/payables represent amounts that are owed, other than charges for goods or services rendered to/from a particular fund in the District and that are due within one year.

G. Inventories

Inventories, which benefit future periods, other than those recorded in the enterprise fund, are recorded as an expenditure during the year of purchase.

Enterprise fund inventories are valued at cost, which approximates market, using the first-in, first-out (FIFO) method. At June 30, 2016, the unused USDA commodities of $2,850 are reported as unearned revenue in the Enterprise Fund.

H. Capital Assets

Capital assets, which include land, construction in progress, property, plant and equipment, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $2,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or through estimation procedures performed by an independent appraisal company. Donated capital assets are valued at their estimated fair value on the date of donation.

The costs of normal repairs and maintenance that do not add to the value of the asset or materially extend the assets lives are not capitalized.

Depreciable capital assets of the District are depreciated using the straight line method. The following estimated useful lives are used to compute depreciation:

Buildings Site Improvements Furniture and Equipment Computer and Related Technology Vehicles

See Note 4 for additional inf01mation regarding capital assets.

Estimated Useful Life

50 years 20 years

10 to 15 years 5 years 8 years

37





I. Accrued Salaries and Wages

Certain District employees who provided services to the District over the ten-month academic year have the option to have their salaries evenly disbursed during the entire twelve-month year. New Jersey statutes require that these earned but not disbursed amounts be retained in a separate bank account. As of June 30, 2016, the amount earned by these employees but not disbursed was $2,375,061 and is included in liabilities - summer escrow payable in the fiduciary fund.

J. Deferred Loss on Defeasance of Debt

The defe1Ted loss on refunding arising from the issuance of the refunding bonds is recorded as a deferred outflow of resources. It is amortized in a systematic and rational manner over the duration of the related debt as a component of interest and other charges on long-term debt. The amortization expense for the year ended June 30, 2016 amounted to $224,573 and the remaining balance at June 30, 2016 is $2,385,142.

K. Compensated Absences

A liability for compensated absences attributable to services already rendered and not contingent on a specific event that is outside the control of the employer and employee is accrued as employees earn the rights to the benefits. The District uses the "vesting method" for estimating its accrued sick and vacation leave liability.

District employees are granted varying amounts of vacation and sick leave in accordance with the District's personnel policy. Upon te1mination, employees are paid for accrued vacation. The District's policy permits employees to accumulate unused sick leave and carry forward the full amount to subsequent years. The amount recorded represents those individuals who have reached retirement age for payment. Upon retirement, employees shall be paid by the District for the unused sick leave in accordance with the District's agreements with the various employee unions.

In the government-wide Statement of Net Position, the liabilities whose average maturities are greater than one year should be reported in two components- the amount due within one year and the amount due in more than one year. The liability for vested compensated absences of the District is recorded in the governmentwide financial statements amounted to $1,057,271 at June 30, 2016. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

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L. Unearned Revenue

Unearned revenue in the general fund represents energy rebates collected in advance and in the special revenue fund represents cash received from federal grants, which has been received but not yet earned and in the adult and community education enterprise fund, represents tuition and fees paid in advance.

M. Long-Term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-te1m obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, are defe1Ted and amortized over the life of the bonds using the straight-line method which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount on a refunding.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are rep01ied as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are rep01ied as either capital projects fund or debt service fund expenditures in the year of issuance.

N. Net Position

Net position represents the difference between assets, deferred inflows of resources, deferred outflows of resources and liabilities in the government-wide financial statements. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net positions are reported as restricted in the government-wide financial statements when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments.

39





0. Fund Balances

GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions ("GASB 54") established fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Under GASB 54, fund balances in the governmental funds financial statements are rep01ied under the modified accrual basis of accounting and classified into the following five categories, as defined below.

1) Nonspendable - includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Assets included in this fund balance category include prepaid assets, inventories, long-term receivables, and corpus of any permanent funds.

2) Restricted - includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

3) Committed - includes amounts that can be used only for the specific purposes imposed by a formal action of the government's highest level of decision-making authority. The District's highest level of decision-making authority is the Board of Education (the "Board") and formal action is taken by resolution of the Board at publicly held meetings. Once committed, amounts cannot be used for other purposes unless the Board revises or changes the specified use by taking the same action (resolution) taken to originally commit these funds.

4) Assigned - amounts intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. Intent is expressed by either the Board or Business Administrator, to whom the Board has delegated the authority to assign amounts to be used for specific purposes, including the encumbering of funds.

5) Unassigned - includes all spendable amounts not contained in the other classifications in the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed or assigned to specific purposes within the general fund. The general fund is the only fund that rep01is a positive unassigned fund balance amount. In the other governmental funds, if expenditures incurred for specific purposes exceed the amounts restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance.

When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first, then unrestricted resources as they are needed. For the unrestricted fund balance, the District first spends committed funds, then assigned funds, and finally, unassigned funds.

Of the $11,080,314 of fund balances in the General Fund at June 30, 2016, $1,590,271 has been restricted in the capital reserve account, $263,208 has been restricted in the emergency reserve account, $2,974,649 has been restricted for excess surplus-prior year, $3,600,000 has been classified as assigned

40





0. Fund Balances

fund balance designated for subsequent years expenditures, $189,641 of encumbrances is assigned to other purposes, $12,751 has been classified as assigned fund balance designated for subsequent years expenditures - SEMI and $2,437,043 is unassigned.

The Capital Projects Fund has $336,192 of fund balance at June 30, 2016 that has been restricted for capital projects.

The Debt Service Fund has $37,309 of restricted fund balance at June 30, 2016.

P. Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

Q. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. Currently, the District has two items that qualify for rep01iing in this category, including deferred losses from the refunding of debt and deferred amounts related to pensions. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The District has one item that qualifies for reporting in this category, deferred amounts related to pensions.

R. On-Behalf Payments

Revenues and expenditures of the general fund include payments made by the State of New Jersey for social security and post-retirement medical pension contributions for certified teachers and other members of the New Jersey Teachers Pension and Annuity Fund. Additionally, revenues and expenses related to on-behalf pension contributions in the government-wide financial statements have been increased by $17,136,704 to adjust for the full accrual basis expense incurred by the State of New Jersey during the most recent measurement period. The amounts are not required to be included in the District's annual budget.

41





S. Calculation of Excess Surplus

The designation for restricted fund balance excess surplus is a required calculation pursuant to N.J.S.A. 18A:7F-7, as amended. New Jersey school districts are required to reserve General Fund fund balance at the fiscal year end of June 30 if they did not appropriate a required minimum amount as budgeted fund balance in their subsequent years' budget. The District did not generate excess fund balance during the 2016 fiscal year. The District also has prior year excess fund balance in the amount of $2,974,649 which was utilized in the 2016-1 7 fiscal year budget.

T. GASB Pronouncements

GASB Pronouncements implemented in the 2016 Fiscal Year

In February, 2015, GASB issued Statement No. 72, Fair Value Measurement and Application ("GASB 72"). The objective of this Statement is to provide guidance for applying fair value for certain assets and liabilities and disclosures related to all fair value measurements. The requirements of this Statement mandate the use of valuation techniques that are appropriate under the circumstances and for which sufficient data are available to measure fair value. The requirements of this Statement will enhance comparability of financial statements among governments by requiring measurement of ce1iain assets and liabilities at fair value using a consistent and more detailed definition of fair value and accepted valuation techniques. The requirements of this Statement are effective for financial statements for pe1iods beginning after June 15, 2015. The District has adopted GASB No. 72 during the year ended June 30, 2016 and it did not have a significant impact on the District's financial statements.

Recently Issued Accounting Pronouncements

GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions ("GASB No. 75"). The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local government employers about financial supp01i for OPEB that us provided by other entities. The Statement will become effective for the District in the 2018 fiscal year and the District has determined that the entire liability will be recorded in the financial statements.

GASB Statement No. 77, Tax Abatement Disclosures ("GASB No. 77"). This Statement requires governments that enter into tax abatement agreements to disclose certain information about the agreements. The Statement will become effective for the District in the 2017 fiscal year. Management has not yet determined the impact of this Statement on financial statement note disclosures.

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U. Subsequent Events

Management has reviewed and evaluated all events and transactions that occurred between June 30, 2016 and December 2, 2016, the date that the financial statements were available for issuance, for possible disclosure and recognition in the financial statement, and other than as disclosed below, no items have come to the attention of the District that would require disclosure.

On July 13, 2016, the District entered into a $440,000 capital equipment lease. The lease carries an interest rate of 1. 76% and requires annual payments through July 1, 2020.

2. Reconciliation of Government-Wide and Fund Financial Statements

Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Position

The governmental fund balance sheet includes a reconciliation between fund balance - total governmental funds and net position - governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that long-term liabilities, including bonds payable, other post-employment benefits, capital leases and compensated absences payable are not due and payable in the cun-ent period and therefore are not reported in the funds. The details of this $58,913,510 difference are as follows:

Bonds payable Premium on bonds Other post-employment benefit payable Capital leases payable Compensated absences Net adjustment to reduce fund balance-total governmental

funds to arrive at net position - governmental activities

3. Deposits and Investments

$ 33,470,000 4,752,807

639,398 18,994,034

1,057,271

$ 58,913,510

New Jersey school districts are limited as to the types of investments and types of financial institutions they may invest in. New Jersey statute 18A:20-37 provides a list of permissible investments that may be purchased by New Jersey school districts.

Additionally, the District has adopted a cash management plan that requires it to deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection

Act ("GUDP A"). GUDPA was enacted in 1970 to protect governmental units from a loss of funds on deposit with a failed banking institution in New Jersey.

43




3. Deposits and Investments (continued)

N.J.S.A. 17:9-41 et. seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Act. Public depositories include savings and loan institutions, banks (both state and national banks) and savings banks, the deposits of which are federally insured. All public depositories must pledge collateral, having a market value at least equal to five percent of the average daily balance of collected public funds, to secure the deposits of governmental units. If a public depository fails, the collateral it has pledged, plus the collateral of all other public depositories, is available to pay the full amount of their deposits to the governmental units. New Jersey statutes require that school districts deposit public funds in public depositories located in New Jersey which are insured by the Federal Deposit Insurance Corporation, or by any other agency of the United States that insures deposits made in public depositories. School districts are also permitted to deposit public funds in the State of New Jersey Cash Management Fund (NJCMF) and New Jersey Asset and Rebate Management Fund (NJARM).

New Jersey statutes (GUDPA) require public depositories to maintain collateral for deposits of public funds that exceed depository insurance limits as follows.

The market value of the collateral must equal at least 5% of the average daily balance of collected public funds on deposit.

In addition to the above collateral requirement, if the public funds deposited exceed 75% of the capital funds of the depository, the depository must provide collateral having a market value at least equal to 100% of the amount exceeding 75%.

All collateral must be deposited with the Federal Reserve Bank of New York, the Federal Reserve Bank of Philadelphia, the Federal Home Loan Bank of New York, or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000.

At June 30, 2016, the carrying amount of the District's deposits was $15,834,743 and the bank balance was $18,199,555. Of the bank balance, $250,000 of the District's cash deposits on June 30, 2016 was secured by federal depository insurance. The New Jersey GUDPA covered the bank balance of $14,553,733. $3,395,822 of the bank balance of the District's agency accounts are not covered by GUDP A. In addition, the District has restricted cash held with fiscal agents in the amount of $5, 199 related to capital leases where the funds are currently held by the lessor.

Pursuant to GASB Statement No. 40, "Deposit and Investment Risk Disclosures" ("GASB 40"), the District's operating cash accounts are profiled in order to determine exposure, if any, to Custodial Credit Risk (risk that in the event of failure of the counterparty the District would not be able to recover the value of its deposits and investments). Deposits are considered to be exposed to Custodial Credit Risk if they are: uncollateralized (securities not pledged to the depositor), collateralized with securities held by the pledging

44





financial institution, or collateralized with securities held by the financial institution's trust department or agent but not in the government's name.

The District does not have a policy for the management of custodial credit risk, other than depositing all of its funds in banks covered by GUDPA. At least five percent of the District's deposits were fully collateralized by funds held by the financial institution, but not in the name of the District. Due to the nature of GUDPA, further information is not available regarding the full amount that is collateralized.

Investments

New Jersey statutes permit the Board to purchase the following types of securities:

a. Bonds and other obligations of the United States or obligations guaranteed by the United States. b. Bonds of any Federal Intermediate Credit Bank, Federal Home Loan Bank, Federal National Mortgage

Agency or of any United States Bank for Cooperatives which have a maturity date not greater than twelve months from the date of purchase.

c. Bonds or other obligations of the School District. d. New Jersey Cash Management Fund and New Jersey Asset and Rebate Management Fund.

New Jersey Asset and Rebate Management Fund and New Jersey Cash Management Fund

In order to maximize liquidity, the District utilizes the New Jersey Asset and Rebate Management Fund ("NJ ARM") and New Jersey Cash Management Fund ("NJCMF") as its investments.

The NJARM, which is an investment pool managed by Public Financial Management Company. NJARM allows governments within the state to pool their funds for investment purposes and the Security and Exchange Commission (SEC) does not restrict the pool. Earnings are allocated to all participants based upon shares held in the pool and distributed on the last day of each month. In addition, the fair value of the District's portion of the pool is the same as the value of its shares. Agencies that participate in the NJARM typically earn returns that mirror short-term investments rates. Monies can be freely added or withdrawn from the NJARM on a daily basis without penalty. At June 30, 2016, the District's balance was $325,019 withNJARM.

The NJCMF is an investment pool administered by the State of New Jersey, Department of the Treasury and issues separate reports that can be obtained directly from the Department of Treasury. It invests pooled monies from various State and non-State agencies in primarily short- term investments. The pooled shares are equal to the value of the District's shares. These investments include: U.S. Treasuries, short- term Commercial Paper, U.S. Agency Bonds, Corporate Bonds, and Certificates of Deposit. Agencies that participate in the NJCMF typically earn returned that mirror short- term investment rates. Monies can be freely added or withdrawn from the NJCMF on a daily basis without penalty. At June 30, 2016 the District's balance with NJCMF was $1,003,270.

45





Custodial Credit Risk: Pursuant to GASB 40, the NJARM and NJCMF, which are a pooled investment, is exempt from custodial credit risk exposure. The District does not have a policy for custodial credit risk.

Credit Risk: The District does not have an investment policy regarding the management of credit risk. GASB 40 requires that disclosure be made as to the credit rating of all debt security investments except for obligations of the U.S. government or investments guaranteed by the U.S. government. NJARM or NJCMF are not rated by a rating agency.

Concentration of Credit Risk: The District places no limit on the amount the District may invest in any one issuer. At June 30, 2016, all of the District's investments were invested in the NJARM and NJCMF.

Interest Rate Risk: The District does not have a policy to limit interest rate risk. The average maturity of the District's investments in the NJARM and NJCMF are less than one year.

All of the District's investments are classified as cash equivalents at June 30, 2016.

4. Capital Assets

The following is a summarization of the governmental activities changes in capital assets for the fiscal year ended June 30, 2016:

Beginning Dispositions I Ending Balance Additions Transfers Balance

Governmental activities: Capital assets, not being depreciated:

Land $ 3,956,475 $ 3,956,475 Construction in progress 12,263,132 $ 2,954,627 $ (I 5,036,439) 181,320

Total capital assets, not being depreciated 16,219,607 2,954,627 (15,036,439) 4,137,795

Capital assets, being depreciated: Land improvements 2,762,766 3,000,844 5,763,610 Buildings and building improvements 72,920,620 2,400,733 15,036,439 90,357,792 Machine1y, equipment and vehicles 10,396,996 666,446 (308,795) 10,754,647

Total capital assets being depreciated 86,080,382 6,068,023 14,727,644 I 06,876,049

Less accumulated depreciation for: Land improvements (1,953,249) (194,264) (2,147,513) Buildings and building improvements (22,332,594) (2,516,474) (24,849,068) Machine1y, equipment and vehicles (6,330,282) (871,367) 262,448 (6,939,201)

Total accumulated depreciation (30,616, 125) (3,582,105) 262,448 (33,935,782)

Total capital assets, being depreciated, net 55,464,257 2,485,918 (46,347) 72,940,267

Governmental activities capital assets, net $ 71,683,864 $ 5,440,545 $ (46,347) $ 77,078,062

46




4. Capital Assets - (continued)

( Depreciation expense was charged to functions/programs of the District as follows:

Instruction Student activities Instruction services Central services Plant operations and maintenance Pupil transportation

Total depreciation expense- governmental activities

$ 2,132,436 478,379 236,917

61,351 422,523 250,499

$ 3,582,105

The following is a summarization of the business-type activities changes in capital assets for the fiscal year ended June 30, 2016:

Business-type activities: Capital assets, being depreciated:

Beginning Balance Increases

Equipment and vehicles $ 918,587 $ 97,291 Less accumulated depreciation for:

Equipment and vehicles (349,788) (57,640) Total business-type activities

capital assets, net $ 568,799 $ 39,651

5. Long-Term Liabilities

Ending Balance

$ 1,015,878

(407,428)

$ 608,450

During the fiscal year ended June 30, 2016, the following changes occuffed in governmental activities longterm liabilities:

Due Beginning Ending Within Balance Additions Reductions Balance One Year

Governmental activities: Compensated absences payable $ 1,085,302 $ 396,527 $ 424,558 $ 1,057,271 $ 557,975 Bonds payable 35,270,000 1,800,000 33,470,000 1,900,000 Other postemployment benefit payable 670,637 178,109 209,348 639,398 Premium on bonds 5,161,460 408,653 4,752,807 408,653 Obligations under capital leases 18,799,210 2,370,893 2,176,069 18,994,034 3,991,864

Sub-total 60,986,609 2,945,529 5,018,628 58,913,510 6,858,492

Net pension liability 40,987,927 8,584,564 49,572,491

Governmental activity long-term liabilities $ 101,974,536 $ 11,530,093 $ 5,018,628 $108,486,001 $ 6,858,492

47




5. Long-Term Liabilities (continued)

The District expects to liquidate the balance in its other postemployment retirement benefit liability, compensated absences payable, net pension liability and capital leases with payments made from the District's general fund. Bonds payable will be liquidated with payments from the debt service fund.

Bonds Payable

Bonds are authorized in accordance with State law or by the voters of the municipality through referendums. All bonds are retired in serial installments within the statutory period of usefulness. Bonds issued by the District are general obligation bonds. The principal and interest of these bonds will be paid from the debt service fund as required by New Jersey statutes.

In August of 2006, the District issued $47,633,000 of School District Bonds in order to fund the District's renovation of various schools within the school district. The bonds were refunded in 2014 and 2015 and the final principal amount of $1,900,000 is due August 15, 2016.

On April 24, 2014, the District issued $19,715,000 of school refunding bonds with interest rates ranging between 3.00% and 5.00%. The District issued the bonds to advance refund $20,350,000 of the outstanding 2006 bonds. The outstanding principal of the defeased debt is $20,350,000 at June 30, 2016 which is to be paid on August 15, 2016.

On February 26, 2015, the District issued $12,025,000 of refunding school bonds with an interest rate of 5.00%. The District issued the bonds to advance refund $13,733,000 of the outstanding 2006 bonds. The outstanding principal of the defeased debt is $13,733,000 at June 30, 2016 which is to be paid on August 15, 2016.

Principal and interest due on the outstanding bonds are as follows:

Fiscal year ending June 30: 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036

Principal

$1,900,000 1,950,000 2,025,000 2,115,000 2,205,000

11,250,000 10,335,000

1,690,000 $33,470,000

Interest

$1,536,775 1,424,400 1,354,650 1,271,850 1,185,450 4,404,550 1,713,125

42,250 $12,933,050

Total

$3,436,775 3,374,400 3,379,650 3,386,850 3,390,450

15,654,550 12,048,125

1,732,250 $46,403,050

48





Bonds Payable - (continued)

Bonds payable at June 30, 2016 are comprised of the following issues:

$47,633,000, 2006 school bonds are due in a final annual installment of $1,900,000 in August 2016 at an interest rate of 4.375%.

$19,715,000, 2014 refunding school bonds are due in annual installments ranging from $1,950,000 to $2,265,000 through August 2025 at interest rates ranging from 3.0% to 5.0%.

$12,025,000, 2015 refunding school bonds are due in annual installments ranging from $1,690,000 to $2,070,000 commencing in August 2026 and through August 2031 at an interest rate of 5.0%

Bonds Authorized But Not Issued

As of June 30, 2016, the District had no authorized but not issued bonds.

Capital Leases Payable

The District has capital leases outstanding for various purposes (phone system, several buses, improvements and various equipment and an Energy Savings Improvement Plan lease) with rates ranging from 0.00% to 2.75%. The following is a schedule of the future minimum lease payments under these capital leases and the present value of the net future minimum lease payments at June 30, 2016:

Fiscal year ending June 30: 2017 2018 2019 2020

2021 2022-2026 2027-2031 2032-2034

Total minimum lease payment Less amount representing interest Present value of net future minimum lease payments

Amount

$ 4,393,250 2,568,815 1,943,264 1,379,988

769,164 4,115,392 4,585,678 2,716,932

22,472,483 (3,4 78,449)

$ 18,994,034

On October 6, 2011 the Board of Education entered into a capital equipment lease with the TD Equipment Finance for an amount not to exceed $1,005,000. The lease was issued at a fixed interest rate of 2.75%. A final principal payment of$206,531 is due on August 1, 2016.

49





Capital Leases Payable (continued)

On October 4, 2012 the Board of Education entered into a capital equipment lease with the TD Equipment Finance for an amount not to exceed $1,005,000. The lease was issued at a fixed interest rate of 2.75%. Principal payments range from $203,726 to $206,527 through August, 2017.

On December 1, 2012 the Board of Education entered into a capital equipment lease with the TD Equipment Finance for an amount not to exceed $1,300,000. The lease was issued at a fixed interest rate of 1.4766%. Principal payments range from $262,544 to $264,618 through August, 2017.

On August 15, 2013 the Board of Education entered into a capital equipment lease with the TD Equipment Finance for an amount not to exceed $1,005,000. The lease was issued at a fixed interest rate of 2.10%. Principal payments range from $200,978 to $205,221 through August, 2018.

On June 14, 2014 the Board of Education entered into a computer hardware lease with the Apple, Inc. for an amount not to exceed $372,899. The lease was issued at a fixed interest rate of 1.134%. Principal payments range from $92,693 to $93,745 through June, 2017.

On June 12, 2014, the Board of Education approved a resolution to finance energy conservation measures pursuant to an Energy Savings Improvement Plan ("ESIP") for an amount not to exceed $14,200,000. A Lease with Bank of America Public Capital Corp ("BOA") was issued on June 26, 2014 in the amount of $14,200,000. The lease was issued at a fixed interest rate of 2.655%. Semi-annual principal payments range from $250,920 to $1,031,000 through July, 2033.

On July 15, 2014, the Board of Education entered into a capital equipment lease with TD Bank for an amount not to exceed $1,200,000. The lease was issued at a fixed interest rate of 1.5611 %. Principal payments range from $241,625 to $253,118 through July 2019.

On January 26, 2015, the Board of Education entered into a computer hardware lease with Apple, Inc. for an amount not to exceed $532,697. The lease was issued at an interest rate of 0.00%. Principal payments are fixed at $133,174 per year payable on each February 15 through 2018.

On July 1, 2015, the Board of Education entered into a capital equipment lease with TD Bank for an amount not to exceed $1,000,000. The lease was issued at an interest rate of 1.50%. Principal payments range from $220,309 to $230,366 through August 2019.

On August 28, 2015, the Board of Education entered into a computer hardware lease with Apple, Inc. for an amount not to exceed $1,370,893. The lease was issued at an interest rate of 0.00%. Principal payments are fixed at $342,723 per year payable on each August 28 through 2018.

50




6. Pension Plans

Description of Systems

Substantially all of the District's employees participate in one of the following contributory defined benefit public employee retirement systems which have been established by State statute: the Teachers' Pension and Annuity Fund (TPAF) or the Public Employees' Retirement System (PERS). These systems are sponsored and administered by the State of New Jersey. The Teachers' Pension and Annuity Fund Retirement System is considered a cost-sharing multiple-employer plan, with a special funding situation, as under cmTent statute, all employer contributions are made by the State of New Jersey on behalf of the Board and the system's other related non-contributing employers. The Public Employees' Retirement System is considered a costsharing multiple-employer plan.

Teachers' Pension and Annuity Fund

The Teachers' Pension and Annuity Fund was established in January 1955 under the provisions of N.J.S.A. 18A:66 to provide coverage including post-retirement health care to substantially all full time public school employees in the State. Membership is mandatory for such employees and vesting occurs after 10 years of service for pension benefits and 25 years for health care coverage.

Age eligibility and benefit provisions were affected by Chapters 92 and 103, P.L. 2007, Chapter 89, P.L. 2008, Chapter 1, P.L. 2010, and Chapter 78, P.L. 2011. Members are classified into one of five tiers dependent upon the date of their enrollment. Tier 1, 2 and 3 members are eligible to retire at age 60, 60, and 62, respectively, with an annual benefit generally determined to be 1155th of the average annual compensation for the highest three fiscal years' compensation for each year of membership during years of credited service. Tier 4 and 5 members are eligible to retire at age 62 and 65, respectively, with an annual benefit generally determined to be 1/60111 of the average annual compensation for the highest five fiscal years' compensation for each year of membership during years of credited service. Anyone who retires early and is under their respective tier's retirement age receives retirement benefits as calculated in the above mentioned f01mulas but at a reduced rate in accordance with applicable New Jersey Statute based upon their tier.

Public Employee's Retirement System

The Public Employees' Retirement System was established in January 1955 under the provisions of N.J.S.A. 43:15A to provide coverage including post-retirement health care to substantially all full time employees of the State or any county, municipality, school Board or public agency provided the employee is not a member of another State-administered retirement system.

Age eligibility and benefit provisions were affected by Chapters 92 and .103, P .L. 2007, Chapter 89, P .L. 2008, Chapter 1, P.L. 2010, and Chapter 78, P.L. 2011. Members are classified into one of five tiers dependent upon the date of their enrollment. Tier 1, 2 and 3 members are eligible to retire at age 60, 60, and 62, respectively, with an annual benefit generally determined to be 1;55th of the average annual compensation for the highest three fiscal years' compensation for each year of membership during years of

51




6. Pension Plans (continued)

credited service. Tier 4 and 5 members are eligible to retire at age 62 and 65, respectively with an annual benefit generally determined to be 1/60th of the average annual compensation for the highest five fiscal years' compensation for each year of membership during years of credited service. Anyone who retires early and is under their respective tier's retirement age receives retirement benefits as calculated in the above mentioned formulas but at a reduced rate in accordance with applicable New Jersey Statute based upon their tier.

The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issued publicly available financial reports that include the financial statements and required supplementary information for TPAF and PERS. The financial reports may be obtained by writing to the State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, P.O. Box 295, Trenton, New Jersey 08625-0295.

Defined Contribution Retirement Plan

DCRP provides eligible members with a tax-sheltered, defined contribution retirement benefit, along with life insurance and disability coverage. Vesting is immediate upon enrollment for members of the DCRP.

Funding Policy

The contribution policy is set by New Jersey State Statutes and contributions are required by active members and contributing members. Plan member and employer contributions may be amended by State of New Jersey legislation. Under the provisions of Chapter 78, P.L. 2011, employee contribution rates for TPAF and PERS increased from 5.5% to 6.5% of employees' annual compensation. An additional increase is to be phased in annually through July 2018 that will bring the total pension contribution rate to 7.5% of employees' annual compensation. Employers are required to contribute at an actuarially determined rate in both the TPAF and PERS. The actuarially determined contribution includes funding for cost-of-living adjustments, noncontributory death benefits, and post-retirement medical premiums. Under current statute the Board is a non-contributing employer of the TP AF.

The District's actuarially determined contributions to PERS amounted to $1,898,568, $1,804,750, and $1,968,936 for the fiscal years ended June 30, 2016, 2015 and 2014, respectively. During the year ended June 30, 2016, the State of New Jersey contributed $9,826,665 to the TPAF for post-retirement medical benefits and other pension and insurance costs on behalf of the Board. Also, in accordance with N.J.S.A. 18A:66-66 the State of New Jersey reimbursed the Board $4,236,382 during the year ended June 30, 2016 for the employer's share of social security contributions for TP AF members as calculated on their base salaries. These amounts have been included in the government-wide and fund financial statements. The employee and employer contributions for the DCRP for the year ended June 30, 2016 were $191,917 and $104,755, respectively. For the year ended June 30, 2015, the employee and employer contributions for the DCRP were $65,144 and $15,930, respectively. For the year ended June 30, 2014, the employee and employer contributions for the DCRP were $28,811 and $8,595, respectively.

52





Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Public Employee 's Retirement System (PERS)

At June 30, 2016, the District rep01ied a liability of $49 ,572,491 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation July 1, 2014, which was rolled forward to June 30, 2015. The District's proportion of the net pension liability was based on a projection of the District's long-term share of contributions to the pension plan relative to the projected contributions of all participating school districts, actuarially determined. At June 30, 2015, the District's proportion was 0.2208325889 percent, which was an increase of 0.0019119709 from its proportion measured as of June 30, 2014.

For the year ended June 30, 2016, the District recognized full accrual pension expense of $3,603,474 in the government-wide financial statements. At June 30, 2016, the District reported deferred outflows of resources and deferred inflows of resources related to PERS from the following sources:

Difference between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments

Changes in proportion and differences between District contributions and proportionate share of contributions

District contributions subsequent to the measurement date

Deferred Outflows

of Resources $ 1, 182,625

5,323,690

1,578,469

1,717,911

$

Deferred Inflows

of Resources

797,030

$ 9,802,695 $ 797,030

$1,717,911 is reported as deferred outflows of resources related to pensions resulting from school district contributions subsequent to the measurement date. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30: 2017 2018 2019 2020 2021

$ 1,385,692 1,385,692 1,385,695 1,996,355 1, 134,320

$ 7,287,754 53





Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (continued)

Additional Information

Actuarial Assumptions The total pension liability for the June 30, 2015 measurement date was determined by an actuarial valuation as of July 1, 2014, which was rolled forward to June 30, 2015. This actuarial valuation used the following actuarial assumptions, applied to all periods included in the measurement:

Inflation rate Salary increases

2012-2021

Thereafter

Investment rate ofreturn

3.04%

2.15 - 4.40%

based on age

3.15-5.40%

based on age

7.90%

The actuarial assumptions used in the July 1, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2008 to June 30, 2011. It is likely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger the impact on future financial statements.

Mortality Rates Mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (setback 1 year for males and females) for service retirement and beneficiaries of former members with adjustments for m01iality improvements from the base year of 2012 based on Projection Scale AA. The RP-2000 Disabled Mortality Tables (setback 3 years for males and setback 1 year for females) are used to value disabled retirees.

Long-Term Rate of Return In accordance with State statute, the long-term expected rate of return on plan investments (7.90% at June 30, 2015) is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pensions and Benefits, the board of trustees and the actuaries. The longterm expected rate of return was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the longterm expected rate of return by weighting the expecting future real rates of return by the target asset

54






allocation percentage and by adding expected inflation. Best estimates of arithmetic rates of return for each major asset class included in PERS's target asset allocation as of June 30, 2015 are summarized in the following table:

Target Long-Term Expected Asset Class Allocation Real Rate of Return

Cash 5.00% 1.04% U.S. Treasuries 1.75% 1.64% Investment Grade Credit 10.00% 1.79%

Mortgages 2.10% 1.62%

High Yield Bonds 2.00% 4.03%

Inflation-Indexed Bonds 1.50% 3.25% Broad US Equities 27.25% 8.52% Developed Foreign Markets 12.00% 6.88% Emerging Market Equities 6.40% 10.00% Private Equity 9.25% 12.41 % Hedge Funds I Absolute Return 12.00% 4.72% Real Estate (Property) 2.00% 6.83%

Commodities 1.00% 5.32%

Global Debt ex US 3.50% -0.40%

REIT 4.25% 5.12% 100.00%

Discount rate

The discount rate used to measure the total pension liability was 4.90% as of June 30, 2015. This single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.90%, and a municipal bond rate of 3.80% as of June 30, 2015 based on the Bond Buyer GO 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the cmTent member contribution rates and that contributions from employers will be made based on the average of the last five years of contributions made in relation to the last five years of recommended contributions. Based on those assumptions, the plan's fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2033. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2033, and the municipal bond rate was

55



Year ended June 30, 20I6



applied to projected benefit payments after that date in determining the total pension liability.

Sensitivity of the District's proportionate share of the net pension liability to changes in the discount rate

The following presents the District's proportionate share of the net pension liability as of June 30, 20 I 6 calculated using the discount rate as disclosed above as well as what the District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is I-percentage-point lower (3.90 percent) or I-percentage-point higher (5.90 percent) than the current rate:

District's proportionate share of the net pension liability

Pension Plan Fiduciary Net Position

At1%

Decrease

(3.90%)

At Current

Discount Rate

(4.90%)

At 1°/o

Increase

(5.90%)

$ 61,612,541 $ 49,572,491 $ 39,478,200

Detailed information about the pension plan's fiduciary net position is available in the separately issued financial report for the State of New Jersey Public Employees Retirement System.


Collective balances of the Local Group at June 30, 20I5 are as follows:

Collective deferred outflows of resources Deferred inflows of resources Net pension liability

District's Propo1iion

$ $ $

3,578, 755,666 993,410,455

22,447,996,119

0.2208325889%

Collective pension expense for the Local Group for the measurement period ended June 30, 20I5 is $I ,48 I ,308,8 I 6.

The average of the expected remaining service lives of all employees that are provided with pension through the pension plan (active and inactive employees) determined at July I, 20I4 (the beginning of the measurement period ended June 30, 20I5) is 5.72 years and 6.44 years for the measurement period ended June 30, 20I4.

56






Teachers Pensions and Annuity Fund (TP AF)

The employer contributions for local participating employers are legally required to be funded by the State in accordance with N.J.S.A. 18:66-33. Therefore, these local participating employers are considered to be in a special funding situation as defined by GASB Statement No. 68 and the State is treated as a nonemployer contributing entity. Since the local participating employers do not contribute directly to the plan (except for employer specific financed amounts), there is no net pension liability or deferred outflows or inflows to report in the financial statements of the local pmiicipating employers. However, the notes to the financial statements of the local participating employers must disclose the portion of the nonemployer contributing entities' total proportionate share of the net pension liability that is associated with the local participating employer.

The State's proportionate share of the TPAF net pension liability associated with the District as of June 30, 2015 was $354,121,149. The District's proportionate share was $0.

The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014, which was rolled forward to June 30, 2015. The State's proportionate share of the net pension liability associated with the District was based on a projection of the State's long-term contributions to the pension plan associated with the District relative to the projected contributions by the State associated with all participating school districts, actuarially determined. At June 30, 2015, the State's proportionate share of the TPAF net pension liability associated with the District was 0.5602804165% percent, which was an increase of0.0003744615% from its proportion measured as of June 30, 2014.

For the year ended June 30, 2016, the District recognized on-behalf pension expense and revenue in the government wide financial statements of $21,622,284 for contributions incurred by the State.

57






Actuarial assumptions

The actuarial valuation used the following actuarial assumptions, applied to all periods included in the measurement:

Mortality Rates

Inflation rate Salary increases

2012-2021

Thereafter

Investment rate ofreturn

2.50%

Varies based on experience

Varies based on experience

7.90%

Mortality rates were based on the RP-2000 Health Annuitant Mortality Tables for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. Pre-retirement mortality improvements for active members are projected using Scale AA from the base year of 2000 until the valuation date plus 15 years to account for future m01iality improvement. Post-retirement mortality improvements for non-disabled annuitants are projected using Scale AA from the base year of 2000 for males and 2003 for females until the valuation date plus 7 years to account for future mortality improvement.

The actuarial assumptions used in the July 1, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2009 to June 30, 2012.

Long-Term Expected Rate of Return

In accordance with State statute, the long-term expected rate of return on plan investments (7.90% at June 30, 2015) is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pensions and Benefits, the board of trustees and the actuaries. Best estimates of arithmetic real rates of return for each major asset class included in TPAF's target asset allocation as of June 30, 2015 are summarized in the following table:

58






Long-Term Expected Rate of Return (continued)

Target Long-Term Expected Asset Class Allocation Real Rate of Return

Cash 5.00% 0.53% US Government Bonds 1.75% 1.39% US Credit Bonds 13.50% 2.72% US Mortgages 2.10% 2.54% US Inflation-Indexed Bonds 1.50% 1.47% US High Yield Bonds 2.00% 4.57% US Equity Market 27.25% 5.63% Foreign-Developed Equity 12.00% 6.22% Emerging Markets Equity 6.40% 8.46% Private Real Estate Property 4.25% 3.97% Timber 1.00% 4.09% Farmland 1.00% 4.61% Private Equity 9.25% 9.15% Commodities 1.00% 3.58% Hedge Funds - MultiStrategy 4.00% 4.59% Hedge Funds - Equity Hedge 4.00% 5.68% Hedge Funds - Distressed 4.00% 4.30%

100.00%

59






Discount Rate

The discount rate used to measure the total pension liability was 4.13% as of June 30, 2015. This single blended discount rate was based on the long-term rate of return on pension plan investments of 7.90%, and a municipal bond rate of 3.80% as of June 30, 2015 based on the Bond Buyer GO 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/ Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the average of the last five years of employers' contributions. Based on those assumptions, the plan's fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2027. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2027, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

Sensitivity of the State's proportionate share of the net pension liability associated with the District to changes in the discount rate

The following presents the State's proportionate share of the net pension liability associated with the District as of June 30, 20I6 calculated using the discount rate as disclosed above as well as what the State's proportionate share of the net pension liability associated with the District would be if it were calculated using a discount rate that is I-percentage-point lower (3.13 percent) or I-percentage-point higher (5.13 percent) than the current rate:

State's proportionate share of

the net pension liability

associated with the District

At 1% Decrease (3.13%)

At Current Discount Rate

(4.13%)

At 1% Increase (5.13%)

$ 420,859,529 $ 354,121,149 $ 296,621,861

Detailed information about the pension plan's fiduciary net position is available in the separately issued TP AF financial report.

60






Collective balances of the Local Group at June 30, 2015 are as follows:

Deferred outflows of resources Deferred inflows of resources Net pension liability

State's proportionate share associated with the District

$ $ $

7 ,522,890,856 623,365,110

63,204,270,305

0. 5602804165%

Collective pension expense of the Local Group for the plan for the measurement period ended June 30, 2015 is $3,854,529,454.

The average of the expected remaining service lives of all employees that are provided with pension through the pension plan (active and inactive employees) determined at July 1, 2014 (the beginning of the measurement period ended June 30, 2015) is 8.3 years and 8.5 years for the measurement period ended June 30, 2014.

7. Post-Retirement Benefits

Funding Policy

P.L. 1987, chapter 384 and P.L. 1990, chapter 6 required Teachers' Pension and Annuity Fund (TPAF) and Public Employees' Retirement System (PERS), respectively, to fund post-retirement medical benefits for those State employees who retire after accumulating 25 years of credited service or on a disability retirement. P.L. 2007, chapter 103 amended the law to eliminate the funding of postretirement medical benefits through the TPAF and PERS. It created separate funds outside of the pension plans for the funding and payment of post-retirement medical benefits for retired State employees and retired educational employees. As of June 30, 2015, there were 107,314 retirees eligible for post-retirement medical benefits and the State contributed $1.25 billion on their behalf. The cost of these benefits is funded through contributions by the State in accordance with P.L. 1994, c.62. Funding of post-retirement medical benefits changed from a pre-funding basis to a pay-as-you-go basis beginning in fiscal year 1994.

The State is also responsible for the cost attributable to P .L. 1992, c.126, which provides employer paid health benefits to members of PERS and the Alternate Benefit Program (ABP) who retired from a board of education or county college with 25 years of service. The State paid $214.1 million toward Chapter 126 benefits for 19,056 eligible retired members in fiscal year 2015.

61




7. Post-Retirement Benefits (continued)

Funding Policy (continued)

The State will set the contribution rate based on the annual required contribution of the employers (ARC), an amount actuarially determined in accordance with parameters of GASB 45. The ARC represents the level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or fimding excess) of the plan over a period not to exceed thirty years. The State's contributions to the SHBP Fund for TPAF retirees' post-retirement benefits on behalf of the District for the years ended June 30, 2016, 2015 and 2014 were $5,341,085, $4,808,669 and $3,883,666, respectively, which equaled the required contributions for each year. The State's contributions to the SHBP Fund for PERS retirees' post-retirement benefits on behalf of the District was not determined or made available by the State of New Jersey.

The District follows the accounting provisions of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions in accounting for its selfadministered post-retirement benefit plan. This statement established guidelines for reporting costs associated with "other postemployment benefits" (OPEB). OPEB costs are calculated based on plan benefits (other than pensions), that the retired employees and their spouses have accrued as a result of their respective years of employment service. Statement No. 45 requires governments to account for other post-employment benefits, primarily health care, on an accrual rather than on a pay-as-you-go basis. The effect is the recognition of an actuarially required contribution as an expense on the government-wide statement of activities when a future retiree earns their postemployment benefit rather than when they use their postemployment benefit. To the extent that an entity does not fund their actuarially required contribution, a postemployment benefit liability is recognized on the governmentwide statement of net position over time. The requirements of this statement are being implemented prospectively, with the actuarially accrued liability for the benefits at June 30, 2009 (date of transition) being amortized over 30 years. Accordingly, for financial reporting purposes, no liability was reported for the postemployment health care benefits liability at the date of transition.

Plan Description

The District provides postemployment medical benefits, including prescription drug coverage, and vision and dental care, in accordance with state statute to participating retirees and their beneficiaries. As of June 30, 2016, the valuation date, approximately 6 retirees and 2 decedents (of surviving spouses) meet the eligibility requirements put forth in P .L. 1992, c 126. The District sponsors and participates in a single-employer defined benefit OPEB plan. The OPEB plan is administered by the District and does not issue a stand-alone financial statement.

Individuals with a minimum of twenty years of service with the District and less than twenty-five years of service with the state of New Jersey are eligible for subsidized medical coverage. A minimum of twenty years of service is required for subsidized dental coverage with no migration to the state plan if exceeding twenty-five years of service.

62





Plan Description (continued)

The obligations of the plan members and the District are established by action of the District pursuant to applicable collective bargaining and employment agreements. The required contribution rates of the employer and members vary depending on the applicable agreement.

Annual OPEB Cost and Net OPEB Obligation

The District's annual OPEB cost (expense) is calculated based on the annual required contribution (ARC) of the employer. The District has engaged an actuary to calculate the ARC and related information per the provisions of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded liabilities (or funding excess) over a period not to exceed thirty years. An updated valuation was prepared for the 2016 fiscal year. The following table presents the components of the District's annual OPEB cost for the last three years, the amount actually contributed to the Plan and changes in the District's net OPEB obligation to the Plan:

Benefit Obligations and Normal Cost

6/30/2014 6/30/2015 6/30/2016

Actuarial accrued liability (AAL) $2,321,680 $2,321,680 $2,321,680 Unfunded actuarial accrued liability (UAAL) $2,321,680 $2,321,680 $2,321,680 Normal cost at beginning of year $201,742 $240,559 Amortization factor based on 30 years ($11,346) ($50, 136) Annual covered payroll $0 $0 UAAL as a percentage of covered payroll 0% 0%

Level Dollar Amortization Calculation of ARC under Entry Age Method

$205,848 ($15,452)

$0 0%

6/30/2014 6/30/2015 6/30/2016

ARC normal cost with interest to end of year Amortization of unfunded actuarial accrued liability

(UAAL) over 30 years with interest at year end Total ARC Interest on net OPEB obligation Adjustment to OPEB Annual OPEB cost (expense) Age adjusted contributions made Net OPEB obligation - beginning of year Net OPEB obligation - end of year

$201,742 $240,559

(11,346) 190,396

15,345 (29,402) 176,339

(205,172) 767,252

$ 738,419

(50,136) 190,396

14,768 (28,297) 176,867 (244,649) 738,419

$670,637

$205,848

(15,452) 190,396

13,413 (25,700) 178,109

(209,348) 670,637

$639.398

63





Funded Status and Funding Progress (continued)

As of June 30, 2014, 2015 and 2016, the actuarial accrued liability for benefits was $2,321,680 all of which was unfunded.

The schedule of funding progress, presented as required supplementary information following the notes to the basic financial statements, presents multi-year trend information that shows whether the value of plan assets is increasing or decreasing over time relative to the accrued liabilities for benefits.

Actuarial Valuations

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future including assumptions about future employment, mortality and healthcare cost trends. Amounts determined regarding the funded status of the Plan and the annual required contributions of the District and Plan members are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the Plan as understood by the employer and the Plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the District and Plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the June 30, 2014, 2015 and 2016 actuarial valuations, the liabilities were computed using the entry age method and level dollar amo1iization over 30 years of which there were 27 years remaining in the prior year and 26 years remaining this year. The actuarial assumptions include a 2% discount rate and an initial healthcare cost trend rate of 9% leveling off to 5% with 1 % annual increments for health care and pharmacy benefits and 4% and 3% for dental and vision leveling off to 3%.

8. Interfund Receivables and Payables

The total interfund accounts receivable and payable for the District at June 30, 2016 amounted to $863,853 analyzed as follows:

lnterfund Interfund Fund Receivable Payable

General Fund $ 863,853 Special Revenue Fund $ 443,001 Capital Projects Fund 420,852

$ 863,853 $ 863,853

64




8. Interfund Receivables and Payables (continued)

The interfunds between the general fund and the special revenue and capital projects funds represent allocations of internally pooled cash from the general fund to liquidate a pooled cash deficit. All interfunds are expected to be liquidated within one year.

9. Economic Dependency

The District receives a substantial amount of its support from federal and state governments. A significant reduction in the level of supp01i, if this were to occur, could have an effect on the District's programs and activities.

10. Contingent Liabilities

The District participates in numerous state and federal grant programs, which are governed by various rules and regulations of the grantor agencies; therefore, to the extent that the District has not complied with the rules and regulations governing the grants, refunds of any money received may be required and the collectability of any related receivable at June 30, 2016 may be impaired. In addition, the District is receiving funding from the New Jersey Schools Development Authority (NJSDA), in connection with its approved referendum projects. The costs associated with the funding received from the NJSDA are subject to a final review of eligible costs and compliance by the New Jersey Department of Education and the NJSDA. To the extent that the District has not complied with the rules and regulations governing the NJSDA funds or has not met the final eligible costs requirements, refunds of any money received may be required. In the opinion of the District, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants; therefore, no provisions have been recorded in the accompanying combined financial statements for such contingencies.

The District is also involved in several claims and lawsuits incidental to its operations. In the opinion of the administration and legal counsel, the ultimate resolution of these matters will not have a material adverse effect on the financial position of the Board.

11. Risk Management

The District is exposed to various risks of loss related to t01is; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District obtains its health and dental coverage through Horizon Blue Cross Blue Shield and Delta Dental, respectively.

65



11. Risk Management (continued)

Property and Liability Insurance


The District maintains commercial insurance coverage for property, liability, student accident and surety bonds and does not retain risk of loss. There have been no significant reductions in insurance coverage from the prior year and no settlements have exceeded insurance coverages over the past three years. A complete schedule of insurance coverage can be found in the statistical section of this report.

The District is a member of the Pooled Insurance Program of New Jersey (the "Fund"). The public entity risk management pool provides general liability, property and automobile coverage and workers' compensation for its members. However, the District receives only workers' compensation coverage from the Fund. The Fund is a risk-sharing public entity risk pool that is an insured and self-administered group of school boards established for the purpose of providing low-cost insurance for its respective members in order to keep property taxes to a minimum. Each member appoints an official to represent their respective entity for the purpose of creating a governing body from which officers for the Fund are elected.

As a member of this Fund, the District could be subject to supplemental assessments in the event of deficiencies. If the assets of the Fund were to be exhausted, members would become responsible for their respective shares of the Fund's liabilities. The Fund can declare and distribute dividends to members upon approval of the State of New Jersey Department of Banking and Insurance. These distributions are divided among the members in the same ratio as their individual assessment related to the total assessment of the membership body. In accordance with Statement No. 10 of the Governmental Accounting Standards Board, these distributions are used to reduce the amount recorded for membership expense in the year in which the distribution was declared.

The June 30, 2016 audit report for the Fund is not available as of the date of this report. Selected, summarized financial information for the Group as of June 30, 2015 (latest available) is as follows:

Total Assets Net Position Total Revenue Total Expense Change in Net Position Net Assets Distribution to Participating Members

Pooled Insurance Program of New Jersey

$ 21.712.514 $ 6.703,267 $ 7,287,919 $ 6.088.877 $ (75,658) $ 1.274,700

Financial statements for the Fund are available at the Fund's Executive Director's Office:

The Burton Agency 44 Bergen Street P.O. Box270 Westwood, New Jersey 07675 (201) 664-0310

66




11. Risk Management (continued)

New Jersey Unemployment Compensation Insurance

The District has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit Reimbursement Method." Under this plan, the District is required to reimburse the New Jersey Unemployment Trust Fund for benefits paid to its former employees and charged to its account with the State. The District is billed quarterly for amounts due to the State.

2015-2016 2014-2015 2013-2014

12. Transfers

Beginning Balance

$ 1,646,403 1,655,761 1,671,074

Interest Earned

$ 1,473

Employee Contributions

$ 179,996 168,393 170,467

Amount Paid

$ 139,249 187,751 177,253

The following presents a reconciliation of transfers during the 2016 fiscal year:

Debt Service Fund Capital Projects Fund

In $ 552

$ 552

Ending Balance

$ 1,687,150 1,646,403 1,665,761

Out

$ 552 $ 552

The transfer from the capital projects fund to debt service fund represents interest earned.

13. Deferred Compensation Plans

The Board offers its employees defeITed compensation plans created in accordance with Internal Revenue Code Section 403(b) and 457. The plans, which are administered by the entities listed below, permit participants to defer a portion of their salary until future years. Amounts defeITed under the plans are not available to employees until termination, retirement, death or unforeseeable emergency.

67




13. Deferred Compensation Plans (continued)

The plan administrators are as follows:

403(b) Plan Administrators ASP AXA Equitable Great West Insurance Company Lincoln Investments Planning Lincoln National Insurance Company Metropolitan Insurance Company Security Benefit/NBA Value Builder Travelers Insurance

Roth 403(b) Plan Administrators Lincoln Investments Planning

14. Capital Reserve Account

457 Plan Administrators AXA Equitable Great West Insurance Company Lincoln Investments Planning Lincoln National Insurance Company Metropolitan Insurance Company Security Benefit/NBA Value Builder ASP Sun America Mutual Funds

A capital reserve account was established by the District by inclusion of $150,000 on July 1, 1996 for the accumulation of funds for use as capital outlay expenditures in subsequent fiscal years. The capital reserve account is maintained in the general fund and its activity is included in the general fund annual budget.

Funds placed in the capital reserve account are restricted to capital projects in the District's approved Long Range Facilities Plan (LRFP). Upon submission of the LRFP to the State Department of Education, a district may increase the balance in the capital reserve by appropriating funds in the annual general fund budget certified for taxes or by transfer by board resolution at year end (June 1 to June 30) of any unanticipated revenue or unexpended line - item appropriation amounts, or both. A district may also appropriate additional amounts when the express approval of the voters has been obtained either by a separate proposal at budget time or by a special question at one of the four special elections authorized pursuant to N.J.S.A. 19:60-2. Pursuant to N.J.A.C. 6A:23A-14.l(g), the balance in the account cannot at any time exceed the local support costs of uncompleted capital projects in its approved LRFP.

The activity of the capital reserve for the July 1, 2015 to June 30, 2016 fiscal year is as follows:

Beginning balance, July 1, 2015 Withdrawals:

2015-16 Budget

Ending balance, June 30, 2016

$

$

3,990,271

(2,400,000)

1,590,271

68




14. Capital Reserve Account (continued)

The balance in the capital reserve at June 30, 2016 did not exceed the balance of the local support costs of uncompleted capital projects in the District's approved LRFP. The withdrawals from the capital reserve account are for use in a DOE approved facilities project, consistent with the District's Long Range Facilities Plan. Of the $1,590,271 balance at June 30, 2016, $1,000,000 has been appropriated in the 2016-2017 budget.

15. Emergency Reserve Account

An emergency reserve account was established by the District by inclusion of $322,000 on June 28, 2010 for the accumulation of funds for use as unanticipated general fund expenditures in subsequent fiscal years. The emergency reserve account is maintained in the general fund and its activity is included in the general fund annual budget.

The emergency reserve account is restricted to be used to accumulate funds in accordance with N.J.S.A. 18A:7F-41c(l) to finance unanticipated general fund expenditures required for a thorough and efficient education. Unanticipated means reasonably unforeseeable and shall not include additional costs caused by poor planning. The maximum balance permitted at any time in this reserve is the greater of $250,000 or 1 % of the general fund budget not to exceed one million dollars. Deposits may be made to the emergency reserve account by board resolution at year end of any unanticipated revenue or unexpended line item appropriation or both. The department has defined year end for the purpose of depositing surplus into reserve accounts as an amount approved by the District board of education between June 1st and June 30tl1. Withdrawals from the reserve require the approval of the Commissioner unless the withdrawal is necessary to meet an increase in total health care costs in excess of four percent.

The emergency reserve balance at June 30, 2016 was $263,208.

16. Restricted Assets

The District has set aside cash and cash equivalents that are classified as restricted assets as they are restricted for use for future capital requirements and emergencies in the general fund.

17. Commitments

The District has contractual commitments at June 30, 2016 to various vendors, for which $189,641 is recorded in the general fund as fund balance assigned to other purposes.

69

Required Supplementary Information Part II



Schedule of Funding Progress

Post-Employment Healthcare Benefit Plan


Actuarial* Accrued Accrued

Actuarial Liability Unfunded Percentage of Actuarial Value of (AAL) Level AAL Funded Covered Covered Valuation Assets Dollar (UAAL) Ratio Payroll Payroll Date (a} (b} (b-a} (a/b} (c} (b-a}/c June 30, 2014 $2,321,680 $2,321,680 0% $0** 0% June 30, 2015 $2,321,680 $2,321,680 0% $0** 0% June 30, 2016 $2,321,680 $2,321,680 0% $0** 0%

*The Actuarial Accrued Liability was calculated using the Alternative Measurement Method as permitted under GASB 45.

** Since there are no active employees of the District that are eligible to participate in the plan in fiscal year 2014, 2015 and 2016, as it relates solely to retirees and the enrollment period has expired, the covered payroll is $0.

70



Schedule of Funding Progress

Post-Employment Healthcare Benefit Plan

Fiscal Year Ended 6/30/2014 6/30/2015 6/30/2016


Annual OPEB Cost

$ 176,339 176,867 178,109

71

District's proportion of the net pension liability (asset) - Local Group

District's proportionate share of the net pension liability (asset)

District's covered-employee payroll

District's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll

Plan fiduciary net position as a percentage of the total pension liability -Local Group

NIA - Information not available

2007

NIA

NIA

NIA

NIA

NIA

20_08 ___

NIA

NIA

12,289,265 $

NIA

NIA

Parsippany-Troy Hills School District Required Supplementary Information

Schedule of the District's Proportionate Share of the Net Pension Liability Public Employee's Retirement System

Last Ten Fiscal Years

Year Ended June 30, 2009 2010 2011 ___ 2012

NIA NIA NIA NIA

NIA NIA NIA NIA

13,319,940 $ 13,859,127 $ 14,478,807 $ 13,957,421

NIA NIA NIA NIA

NIA NIA NIA NIA

~ 2014 2015 ~

NIA 0.2208325889% 0.2189206180% 0.2208325889%

NIA 49,572,491 $ 40,987,927 $ 49,572,491

13,947,204 $ 14,449,640 $ 14,655,575 s 12,967,062

NIA 343.07% 279.67% 382.30%

NIA 47.93% 52.08% 47.93%

72

Parsippany-Troy Hills School District Required Supplementary lnfonmation

Schedule of District Contributions Public Employee's Retirement System

Last Ten Fiscal Years

Year ended June 30,

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Contractually required contribution $ 680,730 $ 939,701 $ 1,014,329 $ 1,216,633 $ 1,591,808 $ 1,723,171 $ 1,599,257 $ 1,576,627 $ 1,804,750 $ 1,717,911

Contributions in relation to the contractually required contribution (680,730) (939,701) (1,014,329) (1,216,633) (1,591,808) (1,723,171) (1,599,257) (1,576,627) (1,804,750) (1,717,911)

Contribution deficiency (excess) $ $ $ $ $ $ $ $ $ $

District's covered-employee payroll $ 12,289,265 $ 13,319,940 $ 13,859,127 $ 14,478,807 $ 13,957,421 $ 13,947,204 $ 14,449,640 $ 14,655,575 $ 14,655,575 $ 12,967,062

Contributions as a percentage of covered-employee payroll 5.54% 7.05% 7.32% 8.40% 11.40% 12.35% 11.07% 10.76% 12.31% 13.25%

73

Parsippany-Troy Hills School District Required Supplementary Information

Schedule of the State's Proportionate Share of the Net Pension Liability Associated With the District Teachers' Pension and Annuity Fund

Last Ten Fiscal Years*

Year Ended June 30, 2015

State's proportion of the net pension liability (asset) associated with the District -Local Group 0.5599059555%

District's proportionate share of the net pension liability (asset) $

State's proportionate share of the net pension liability (asset) associated with the District $ 299,251,510

Total proportionate share of the net pension liability (asset) associated with the District $ 299,251,510

Plan fiduciary net position as a percentage of the total pension liability 33.64%

The amounts presented for each fiscal year were determined as of the previous fiscal year-end.

* This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, governments should present information for those years for which information is available.

Covered payroll information is not presented since the Teachers' Pension and Annuity Fund is a special funding situation in which the District does not make a contribution to this plan.

See accompanying notes to required supplementary information.

$

$

$

2016

0 .5602804165%

354, 121, 149

354, 121, 149

28.71%

74


Notes to Required Supplementary Information Year Ended June 30, 2016

1. PUBLIC EMPLOYEES' RETIREMENT SYSTEM

Benefit Changes

There were none.

Changes of Assumptions

The discount rate changed from 5.39% as of June 30, 2014 to 4.90% as of June 30, 2015.

2. TEACHERS PENSION AND ANNUITY FUND

Benefit Changes

There were none.

Changes of Assumptions

The discount rate changed from 4.68% as of June 30, 2014 to 4.13% as of June 30, 2015.

75

Required Supplementary Information Part III

Budgetary Comparison Schedules

Revenues Local sources:

Local tax levy Tuition from individuals Interest Miscellaneous

Total revenues - local sources

State sources: Special education categorical aid Equalization aid Security aid Extraordinary aid Transportation aid P ARCC readiness aid Per pupil growth aid Additional adjustment aid Additional nonpublic transportation aid Homeless tuition reimbursement

Parsippany-Troy Hills School District General Fund

Budgetary Comparison Schedule (Budgetary Basis)


Original Budget Budget Transfers

125,598,737 300,000

200,000 126,098,737

3,956,158 95,367

132,915 300,000 295,061

69,790 69,790

1

On-behalf IP AF noncontributory insurance (non-budgeted) On-behalf IP AF post retirement benefit contributions (non-budgeted) Reimbursed IP AF social security contributions (non-budgeted)

Total - state sources

Federal sources: Medicaid reimbursement

Total - Federal sources

Total revenues

Expenditures Current Expenditures:

Instruction - regular programs: Salaries of teachers:

Preschool Kindergarten Grades 1-5 Grades 6-8 Grades 9-12

Home Instruction: Salaries of teachers Purchased professional - educational services

Undistributed Instruction: Other salaries for instruction Purchased technical services Other purchased services General supplies Textbooks Other objects

Total instruction - regular programs

Special Education: Learning I Language Disabilities: Salaries of teachers Other salaries for instruction Purchased professional - educational services Purchased technical services Other purchased services General supplies

Total learning/language disabilities Other purchased services

Special Education Instruction - Auditory Impairments: Salaries of teachers General supplies

Total auditory impairments

4,919,082

75,757 75,757

131,093,576

847,560 $ 27,294 2,020,439 52,828

11,439,481 767,103 10,254,867 (156,732) 11,786,630 273,269

203,500 (158,684) 119,700

88,226 149,195 46,530 218

301,284 (16,587) 1,551,799 (223,827)

696,594 14,344 319,725 (5,302)

39,556,635 842,819

1,159,728 266,987 634,385 (238,405)

1,000 12,000 2,550 9,000 (5,000)

46,520 (2,550) 1,862,633 23,582

91,016 (900) 3,500

94,516 (900)

Final Budget

$ 125,598,737 300,000

200,000 126,098,737

3,956,158 95,367

132,915 300,000 295,061

69,790 69,790

1

4,919,082

75,757 75,757

131,093,576

874,854 2,073,267

12,206,584 10,098,135 12,059,899

44,816 119,700

237,421 46,748

284,697 1,327,972

710,938 314,423

40,399,454

1,426,715 395,980

1,000 14,550 4,000

43,970 1,886,215

90,116 3,500

93,616

Actual

125,598,737 281,529

2,438 260,941

126,143,645

3,956,158 95,367

132,915 1,054,238

295,061 69,790 69,790

1 57,361 13,213

212,841 9,613,824 4,236,382

19,806,941

88,647 88,647

146,039,233

874,854 2,073,267

12,199,096 10,098,132 12,051,199

44,816 92,320

237,244 33,981

225,809 1,199,296

613,807 295,427

40,039,248

1,426,714 395,980

460 14,549

912 42,652

1,881,267

90,115

90,115

C-1 p. 1

Variance

Final Budget to Actual

(18,471) 2,438

60,941 44,908

754,238

57,361 13,213

212,841 9,613,824 4,236,382

14,887,859

12,890 12,890

14,945,657

7,488 3

8,700

27,380

177 12,767 58,888

128,676 97,131 18,996

360,206

540

3,088 1,318 4,948

3,500 3,501

76

Expenditures (continued) Current expenditures (continued): Special Education - Behavioral Disabilities:

Salaries of teachers Other salaries for instruction General supplies

Total behavioral disabilities

Special Education - Multiple Disabilities: Salaries of teachers Other salaries for instruction General supplies Textbooks

Total multiole disabilities

Resource Room/Center: Salaries of teachers General supplies

Total resource room/center

Special Education - Autism: Salaries of teachers Other salaries for instruction General supplies

Total autism

Special Education - Preschool Disabilities - Part Time: Salaries of teachers Other salaries of instruction General supplies

Total preschool disabilities - part time

Total Special Education - Instruction

Basic Skills/Remedial Instruction: Salaries of teachers

Total basic skills/remedial instruction

Bilingual Education - Instruction:

Salaries of teachers

Other salaries of instruction Purchased professional - educational services General supplies

Textbooks Total bilingual education - instruction

Vocational Programs - Local - Instruction: Salaries of teachers Other purchased services General supplies

Total vocational programs - local- instruction

School-Sponsored Cocurricular Activities:

Salaries Purchased services Supplies and materials Other objects

Total school-sponsored cocurricular activities




Original Budget Final

Bndget Transfers Budget

$ 169,357 $ 9,954 $ I 79,311 30,409 1,028 31,437

1,030 1,030 200,796 10,982 211,778

987,464 24,709 1,012,173 60,818 (2,144) 58,674

8,550 300 8,850 2,800 2,800

L059.632 22.865 L082.497

5,493,294 (480,349) 5,012,945 33,700 (3,869) 29,831

5,526,994 (484,218) 5,042,776

376,882 (21,956) 354,926 121,558 42,896 164,454

2,860 2,860 501,300 20,940 522,240

24,000 (5,343) 18,657 297,326 27,129 324,455

6,435 6,435 327,761 21,786 349,547

9,573,632 (384,963) 9,188,669

2,532,119 (272,7252 2,259,394 2,532,119 (272,725) 2,259,394

1,036,502 43,647 1,080,149

9,051 9,051

23,300 23,300 55,386 (270) 55,116

14,185 14,185 1,129,373 52,428 1,181,801

107,871 (60,614) 47,257 1,750 1,750

19,500 (2,210) 17,290 129,121 (62,824) 66,297

427,452 94,875 522,327 10,240 603 10,843 32,603 (4,850) 27,753 87,700 25,635 113,335

557,995 116,263 674,258

Actual

$ 179,311 31,437

1,030 211,778

1,011,491 58,674

7,361 1,350

L078.876

5,011,715 26,433

5,038,148

354,925 164,453

2,554 521,932

18,657 324,455

6,094 349,206

9,171,322

2,259,394 2,259,394

1,080,148

9,051

3,550 2,684

2,105 1,097,538

47,257

8,320 55,577

454,243 4,026

14,799 86,997

560,065

$

C-1 p.2

(continued)

Variance Final

to Actual

682

1,489 1,450 3.621

1,230 3,398 4,628

306 308

341 341

17,347

19,750 52,432 12,080

84,263

1,750 8,970

10,720

68,084 6,817

12,954 26,338

114,193

77




Expenditures (continued)

Current expenditures (continued):

School-Sponsored Athletics - Instruction:

Salaries

Purchased services

Supplies and materials

Other objects

Transfers to cover deficit (Agency funds)

Total school-sponsored athletics - instruction

Total Instruction

Undistributed Instruction: Tuition to other LEAs within the state-regular Tuition to other LEAs within the state-special Tuition to county voe. school dist-regular Tuition to county voe. school dist-special Tuition to CSSD and regional day schools Tuition to private school for the disabled - within state Tuition - other

Total undistributed instruction

Health Services: Salaries Purchased professional and technical services Other purchased services Supplies and materials Other objects

Total health services

Other Support Services-Speech, OT, PT & Related Services: Salaries Purchased professional - educational services Supplies and materials

Total other support services-speech, OT, PT & related services

$

Original Budget

1,158,809

127,425

235,390

77,360

70,000

1,668,984

55,147,859

171,763 1,773,532

20,456 531,072

5,921,277 52,307

8,470,407

1,418,392 82,000

5,000 47,669 10,000

1,563,061

1,683,799 1,295,000

3,600 2,982,399

$

Budget Transfers

100,209

(34,337)

48,368

19,130

133,370

424,368

7,802 61,033

(109,532)

(9,314) 405,680

355,669

(95,645)

(16,822) 6,892

(105,575)

(44,293) 88,436

44,143

$

Final Budget

1,259,018

93,088

283,758

96,490

70,000

1,802,354

55,572,227

7,802 232,796

1,664,000 20,456

521,758 6,326,957

52,307 8,826,076

1,322,747 82,000

5,000 30,847 16,892

1,457,486

1,639,506 1,383,436

3,600 3,026,542

Actual

$ 1,259,018

88,090

281,673

85,549

67,383

1,781,713

54,964,857

7,801 232,796

1,654,316 12,750

520,688 6,211,682

19,140 8,659,173

1,322,747 80,957

1,276 15,370 16,892

1,437,242

1,639,505 1,240,869

2,721 2,883,095

C-1 p.3

(continued)

$

Variance Final

to Actual

4,998

2,085

10,941

2,617

20,641

607,370

9,684 7,706 1,070

115,275 33,167

166,903

1,043 3,724

15,477

20,244

142,567 879

143,447

78



Expenditures (continued) Current expenditures (continued): Undistributed Expenditures (continued):

Other support services - students - extra services:

Salaries Total other support services - students - extra services

Guidance: Salaries of other professional staff Salaries of secretarial and clerical assistants Purchased professional - educational services

Supplies and materials Total guidance

Child Study Teams: Salaries of other professional staff Other purchased services Miscellaneous purchased services Supplies and materials Other objects

Total child study teams

Improvement of Instructional Services: Salaries of supervisor of instruction Sal of seer & clerical assist. Other purchased services Supplies & materials Other objects

Total improvement of instructional services

Educational Media Services/School Library: Salaries Purchased professional and technical services Other purchased services Supplies and materials Other objects

Total educational media services/school library


$

Original Budget

2,206,839

2,206,839

2,875,170 335,381

10,700 8,221

3,229,472

2,283,380 39,000

143,000 115,025

2,500 2,582,905

1,885,902 507,594

21,800 7,500

58,500 2,481,296

1,549,397 80,093

396,700 205,070

24,250 2,255,510

$

Budget Transfers

581,681

581,681

68,383 (51,908)

3,000 (255)

19,220

(161,920)

6,575 108,555

(30) (46,820)

42,512 37,250

2,022

81,784

(34,113) 27,039 37,889

(10,200) (667)

19,948

$

Final Budget

2,788,520

2,788,520

2,943,553 283,473

13,700 7,966

3,248,692

2,121,460 39,000

149,575 223,580

2,470 2,536,085

1,928,414 544,844 21,800

9,522 58,500

2,563,080

1,515,284 107,132 434,589 194,870 23,583

2,275,458

$

Actual

2,788,496

2,788,496

2,943,199 283,473

13,686 4,679

3,245,037

2,121,460 31,645

130,913 79,429

870 2,364,317

1,925,042 544,844

8,256 5,631

45,922 2,529,695

1,515,284 100,261 419,248 185,602 22,618

2,243,013

C-1 p.4

(continued)

$

Variance Final

to Actual

24

24

354

14 3,287 3,655

7,355 18,662

144,151 1,600

171,768

3,372

13,544 3,891

12,578 33,385

6,871 15,341 9,268

965 32,445

79

C-1 p. 5

(continued)



Year ended June 30, 2016 Variance

Original Budget Finni Final Budget Transfers Budget Actual to Actual

Expenditures (continued) Cunent expenditures (continued): Undisn·ibuted expenditures (continued): Instructional Staff Training Services:

Salaries of supe1visors of instruction 108,024 (108,024) Salaries of other professional staff 95,000 (6,174) 88,826 $ 88,826 Salaries of secretarial and clerical assist. 35,23 I (35,23 I) Other purchased services 5,500 5,500 3,552 1,948 Supplies and materials I 1,000 2,055 13,055 12,218 837 Other objects 111,660 (43,960) 67,700 50,488 17,212

Total instructional staff training services 366,415 (191,334) 175,081 155,084 19,997

Support Services-General Administration: Salaries 371,838 33,492 405,330 405,330 Legal Services 225,000 225,000 131,261 93,739 Audit Fees 77,000 77,000 77,000 Other purchased professional services 6,000 6,000 5,312 688 Conununications I telephone 458,000 (163, 138) 294,862 268,392 26,470 BOE other purchased se1vices 17,300 618 17,918 9,143 8,775 Other purchased se1vices 10,000 (7,355) 2,645 2,645 General supplies 6,000 (1,296) 4,704 1,560 3,144 BOE in-house n·aning/meeting supplies I 1,316 29,557 40,873 40,724 149 Judgments against the school disn-ict 159,114 (24,379) 134,735 116,938 17,797 Miscellaneous expenditures 19,000 (8,550) 10,450 9,322 1,128 BOE membership and dues 28,341 (1,678) 26,663 26,663

Total suppmt services-general administration 1,382,909 (136,729) 1,246, 180 1,091,645 154,535

Support Services-School Administration: Salaries of principals/ assistant principals 2,886, 160 (109,282) 2,776,878 2,776,878 Salaries of other professional staff 64,688 (1,000) 63,688 63,688 Salaries of secretarial and clerical assistants 1,367,967 74,307 1,442,274 1,442,274 Purchased professional and technical services 17,500 17,500 8,600 8,900 Other purchased se1vices 68,550 (12,295) 56,255 20,703 35,552 Supplies and materials 56,569 53,661 110,230 98,384 11,846

Total supp011 services-school administration 4,443,934 22,891 4,466,825 4,410,527 56,298

Support Services - Central Services: Salaries 1,390,506 (15,696) 1,374,810 1,374,810 Purchased professional services 34,500 15,739 50,239 32,112 18, 127 Purchased technical services 56,000 59,312 115,312 115,312 Miscellaneous purchased services 46,000 (30,093) 15,907 13,905 2,002 Supplies and materials 50,100 (21,592) 28,508 25,090 3,418 Interest on lease purchase agreements 61,353 249 61,602 61,602 Miscellaneous expenditures 13,550 (5,100) 8,450 8,242 208

Total supp01t services-central services 1,652,009 2,819 1,654,828 1,631,073 23, 755

Support Services - Administration Information Technology: Salaries 1,156,766 (62,543) 1,094,223 1,094,223 Purchased professional services 259,889 (15,916) 243,973 241,587 2,386 Purchased technical services 26,523 (350) 26,173 17,625 8,548 Other purchased services 326,200 (1,649) 324,55 I 315,904 8,647 Supplies and materials 32,700 (26,183) 6,517 6,517 Other objects 12,780 12,780 2,872 9,908

Total supp01t services-administration infonnation technology 1,814,858 (106,641) 1,708,217 1,678,728 29,489

Required Maintenance for School Facilities: Salaries 1,416,335 (50,625) 1,365,710 1,365,710 Cleaning, repair and maintenance services 615,259 162,448 777,707 777,707 General supplies 472,000 25,298 497,298 490,916 6,382 Other objects 27,000 56,142 83,142 83,142

Total required maintenance for school facilities 2,530,594 193,263 2,723,857 2,717,475 6,382

80




Expenditures (continued) Current expenditures (continued): Undistributed expenditures (continued):

Custodial Services: Salaries Salaries of non-instructional aides Purchased professional and technical services

Cleaning, repair and maintenance services Other purchased property services Insurance General supplies Energy (electricity, oil and gas) Interest - energy savings improvement program Principal - energy savings improvement program

Total custodial services

Security: Salaries

Purchased professional and technical services Total security

Total operation of plant Total Undist. Expend

Student Transportation Services: Salaries of non-instructional aides Salaries for pupil transportation:

Between home and school - regular Between home and school - special

Other purchased professional and technical services Cleaning repair and maintenance services

Contr serv (bet. Home & Sch)- vendors Contr serv ( oth than bet. Home & Sch) - vendors Contr serv (bet. Home & Sch) - joint agrmnts Contract. Serv. (reg. students) - ESCs & CTSAs Contract. Serv. (spl. Ed. Students) - ECSs & CTSAs Contract. Serv. - aid in lieu pymts -non pub sch

Miscellaneous purchased services-transportation General supplies Other objects

Total student transportation services

Original Budget

$ 3,646,126 851,708 20,000 19,000

300,000 753,000 250,000

2,675,000

8,514,834

587,678 100,000 687,678

11,733,106 47,165,120

192,606

144,007 718,372

9,900 200,000

2,411,401 164,146 263,000

13,794 2,076,460

372,166 40,000 15,218

8,900 6,629,970

$

Budget Transfers

99,413 (33,738) (10,810) (14,193) (78,629) (42,649) 52,092

(687,323) 584,867 237,000 106,030

(377,628) 39,672

(337,956) (38,663) 502,393

88,611

77,076 107,411

(7,753) 11,906

(55,223) 174,418

(2,913) (7,332) (1,289)

(38,387) (27,064)

(6,435) (5,131)

307,895

$

Final Budget

3,745,539 817,970

9,190 4,807

221,371 710,351 302,092

1,987,677 584,867 237,000

8,620,864

210,050 139,672 349,722

11,694,443 47,667,513

281,217

221,083 825,783

2,147 211,906

2,356,178 338,564 260,087

6,462 2,075,171

333,779 12,936 8,783 3,769

6,937,865

$

Actual

3,705,501 817,970

9,190 4,807

217,597 688,381 279,592

1,621,087 584,867 237,000

8,165,992

210,050 139,671 349,721

11,233,188 46,350,313

281,217

221,083 825,783

2,147 207,963

2,356,178 256,457 141,416

6,462 2,003,556

332,275 12,936

8,783 3,565

6,659,821

C-1 p.6

(continued)

$

Variance Final

to Actual

40,038

3,774 21,970 22,500

366,590

454,872

461,255 1,317,200

3,943

82,107 118,671

71,615 1,504

204 278,044

81


Budgetary Analytics Comparison Schedule

(Budgetary Basis) Year ended June 30, 2016

Expenditures (continued) Current expenditures (continued): Undistributed expenditures (continued): Unallocated Benefits - Employee Benefits:

Social security contributions Other retirement contributions - PERS Other retirement contributions - regular Workers' compensation Health benefits Tuition rein1bursement Other employee benefits

Total unallocated benefits

On-Behalf Contributions On-behalf TP AF Noncontributory Insurance (non-budgeted) On-behalf TP AF Post Retirement Benefit Contributions (non-budgeted) Reinlbursed TP AF social security contributions (non-budgeted)

Total on-behalf contributions

Total Personal Services - Employee Benefits

Equipment: Kindergarten Grades 1-5 Grades 6-8 Grades 9-12 Undistributed expenditures - admin info tech Undistributed expenditures - required maint for school facilities

Total equipment

Facilities Acquisition and Construction Services:

Other purchased professional and techical services

Construction services

Non-budgeted - capital leases

Lease purchase agreements - principal

Other objects - debt service assessment

Total facilities and construction services

Total Expenditures - Capital Outlay

Other Leases:

Non-budgeted Apple lease expenditures

Total Other Leases

$

Original Budget

1,754,400 1,950,000

70,000 525,831

16,615,822 222,000

1,085,850 22,223,903

22,223,903

20,000 20,000 20,000 20,000

80,000

250,000

5,498,500

1,496,597

46,633

7,291,730

7,371,730

$

Budget Transfers

10,616 (51,432)

70,323 (98,270)

(1,248,568)

(116,821) (1,434, 152)

(1,434,152)

(20,000) (20,000) (20,000) (12,255) 245,479 166,157 339,381

152,038

442,472

594,510

933,891

$

Final Budget

1,765,016 1,898,568

140,323 427,561

15,367,254 222,000 969,029

20,789,751

20,789,751

7,745 245,479 166,157 419,381

250,000

5,650,538

1,939,069

46,633

7,886,240

8,305,621

$

Actual

1,765,016 1,898,568

140,323 427,561

15,347,374 165,034 874,290

20,618,166

212,841 9,613,824 4,236,382

14,063,047

34,681,213

7,745 245,479 155,992 409,216

214,917

5,408,306

1,000,000

1,939,069

46,633

8,608,925

9,018,141

1,370,893

1,370,893

C-1 p. 7

(continued)

$

Variance Final

to Actual

19,880 56,966 94,739

171,585

(212,841) (9,613,824) (4,236,382)

(14,063,047)

(13,891,462)

10,165 10,165

35,083

242,232

(1,000,000)

(722,685)

(712,520)

(1,370,893)

(1,370,893)

82


Budgetary Analytics Comparison Schedule (Budgetary Basis)


Original Budget Budget Transfers

Expenditures (continued)

Transfer of funds to charter schools $ 367,102 $ (13,000) $

Total Expenditures 138,905,684 721,395

(Deficiency) excess of revenues (under) over

expenditures (7,812,108) (721,395)

Other financing sources:

Assets acquired under capital lease (non-budgeted)

Other capital leases (non-budgeted)

Total other financing sources

(Deficiency) excess of revenues (under) over

expenditures and other financing

sources (7,812,108) (721,395)

Fund balances, July 1 16,507,301

Fund balances, June 30 $ 8,695, 193 $ (721,395) $

Recapitulation of (deficiency) excess of

revenues (under) over expenditures Budgeted fund balance $ (5,412,108) $

Net (decrease) in capital reserve (2,400,000)

Adjustment for prior year encumbrances $ (721,395)

Total $ (7,812,108) $ (721,395) $

Recapitulation of fund balance: Capital reserve account - restricted

Emergency reserve account - restricted

Capital Reserve Designated for subsequent years- restricted

Excess surplus designated for subsequent years - restricted

Designated for subsequent year's expenditures - assigned

Designated for subsequent year's expenditures - SEMI - assigned

Year end encumbrances - assigned

Unassigned

Reconciliation to Governmental Funds

statements (GAAP):

Last state aid payments not recognized

on GAAP basis

Fund balance per Governmental Funds (GAAP)

Final Budget Actual

354,102 $ 338,426

139,627,079 153,383,664

(8,533,503) (7,344,431)

1,000,000

1,370,893

2,370,893

(8,533,503) (4,973,538)

16,507,301 16,507,301

7,973,798 $ 11,533,763

(5,412,108) $ (1,852,143)

(2,400,000) (2,400,000)

(721,395) (721,395)

(8,533,503) $ (4,973,538)

$ 590,271

263,208

1,000,000

2,974,649

3,600,000

12,751

189,641

2,903,243

11,533,763

(453,449)

$ 11080314

$

$

$

$

C-1 p. 8

Variance Final

to Actual

15,676

(13,385,692)

1,189,072

1,000,000

1,370,893

2,370,893

3,559,965

3,559,965

3,559,965

3,559,965

83

C-2

Parsippany-Troy Hills School District Special Revenue Fund



Variance Original Budget Final Final Budget Transfers Budget Actual to Actual

Revenues State sources $ 199,249 $ 12,017 $ 211,266 $ 174,051 $ (37,215) Federal sources 2,789,932 314,843 3,104,775 2,581,221 (523,554) Local sources 29,414 29,414 24,562 (4,852) Total revenues 2,989,181 356,274 3,345,455 2,779,834 (565,621)

Expenditures: Instruction:

Salaries of teachers 634,951 18,934 653,885 589,525 64,360 Purchased professional & technical services 37,738 49,052 86,790 72,337 14,453 Other purchased services 48,711 (47,911) 800 800 Tuition 994,954 994,954 986,119 8,835 General supplies 139,262 (32,972) 106,290 53,003 53,287 Textbooks 29,350 29,350 26,139 3,211 Other objects 7,000 (7,000)

Total instruction 1,891,966 (19,897) 1,872,069 1,727,923 144,146

Undistributed: Support services:

Salaries of supervisors of instruction 376,425 (146,425) 230,000 210,815 19,185 Personal services-employee benefits 236,795 (4,373) 232,422 176,188 56,234 Purchased professional educational services 149,625 336,500 486,125 425,577 60,548 Other purchased services 291,057 (131,522) 159,535 156,686 2,849 Supplies and materials 43,313 71,991 115,304 82,645 32,659

Total support services 1,097,215 126,171 1,223,386 1,051,911 171,475

Capital outlay: Facilities acquisition and

construction services: N oninstructional equipment 250,000 250,000 250,000

Total capital outlay 250,000 250,000 250,000 Total expenditures 2,989,181 356,274 3,345,455 2,779,834 565,621

Excess of revenues over expenditures $ - $ - $ - $ - $

84

Parsippany-Troy Hills School District Note to Required Supplementary Information

Budget to GAAP Reconciliation


Sources/inflows of resources Actual amounts (budgetary basis) "revenue" from the

budgetary comparison schedule (C-1, C-2)

Differences - Budgetary to GAAP:

Grant accounting budgetary basis differs from GAAP in that encumbrances are recognized as expenditures, and the related revenue is recognized.

Prior year, net of cancellations Current year

State aid payments recognized for budgetary purposes, not recognized for GAAP statements.

Prior year Current year

Total revenues as reported on the statement ofrevenues, expenditures and changes in fund balances - governmental funds (B-2)

Uses/outflows of resources Actual amounts (budgetary basis) "total outflows" from the

budgetary comparison schedule (C-1, C-2)

Differences - Budgetary to GAAP:

Encumbrances for supplies and equipment ordered but not received are reported in the year the order is placed for budgetary purposes, but in the year the supplies are received for financial reporting purposes. Prior year, net of cancellations Current year

Total expenditures as reported on the statement ofrevenues, expenditures, and changes in fund balances - governmental funds (B-2)

General Fund

$ 146,039,233 $

451,578 (453,449)

$ 146,037,362 $

$ 153,383,664 $

$ 153,383,664 $

Special Revenue

Fund

C-3

2,779,834

11,420 (2,427)

2,788,827

2,779,834

11,420 (2,427)

2,788,827

85

Supplementary Information

Special Revenue Fund

Revenues: State sources Federal sources Local sources

Total reYenues

fa.l)enditures: Instruclion:

Salaries of teachers Purchased professional & teclmical services Other purchased services Tuition General supplies Te:-.1-books

Total instruction

Support services: Salaries of other professional staff Personal services-employee benefits Purchased professional educational seni.ces Other purchased seni.ces Supplies and materials

Total support seni.ces

Total expenditures


Combining Schedule of Program Revenues and Expenditures Budgetary Basis


Nonpublic Aid

Local Corrective Examination & Suoulementan· Grants Soeech Clanification Instruction

7,525 23,865 18,044

7,525 23,865 18,044

7,525 7,174 18,044 800

23,762

24,562 7,525 7,174 18,044

16,691

16,691

24.562 7,525 23,865 18,044

Auxiliary Sen ices

E-1 p. 1

Coniuensaton· Education

39,594

39.594

39,594

39,594

39,594

86


Total revenues

ExPenditures: Instruction: Salaries of teachers Purchased professional & teclutlcal services Other purchased services Tuition General supplies Te>.1books Total instruction

Support services: Salaries of other professional staff Personal services-employee benefits Purchased professional educational services Other purchased services Supplies and materials

Total support services

Total expenditures



Securin.· Aid


12,850

12.850

12,850 $

12,850

12.850

Nunin2 Aid

32,670

32,670

32,670

32,670

32,670

Nonpublic Aid

Technoloin· Aid

13,364

13,364

13,364

13,364

13,364

Textbook Aid

26,139

26.139

26,139 26,139

26,139

E-1 p. 2

(continued)

Title I. Part A

Current

434,746

434,746

310,010

4,519

314,529

120,217

120,217

434,746

87


Total revenues

fa.l)enditures: Instruction:

Salaries of teachers Purchased professional & teclmical services Other purchased services Tuition General supplies Te,.1books

Total instruction

Support services: Salaries of other professional staff Personal services-employee benefits Purchased professional educational senices Other purchased services Supplies and materials

Total support senr:ices

Total e;\l)enclitures




Titleil,PartA Title ID LD.E.A.

Current Current

65,699 160,438

65,699 160,438

103,363

15,877

119,240

37,507

65,699 3,691

65,699 41,198

65,699 160,438

Immigrant

67,199

67,199

62,285

62,285

2,318

2,171 425

4,914

67,199

PartB Buie

Current

1,734,405

l.734,405

113,867

924,026

l,037,893

210,815 16,146

363,366 85,125 21,060

696,512

1,734,405

Preschool FEMA

57,574 61,160

57,574 61,160

57,574

57,574

61,160

61,160

57,574 61,160

E-1 p, 3

(continued)

Total

174,051 2,581,221

24,562 2,779,834

589,525 72,337

800 986,119

53,003 26,139

1,727,923

210,815 176,188 425,577 156,686 82,645

1,051,911

2,779,834

88

Capital Projects Fund

Parsippany-Troy Hills School District Capital Projects Fund

F-1

Summary Schedule of Project Revenues, Expenditures, and Changes in Fund Balance

(Budgetary Basis)


Revenues and other financing sources Bond proceeds State sources - SDA Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay Interest earned

Total revenues and other financing sources

Expenditures and other financing uses Purchased professional and technical services Construction services Contingency Other Objects Transfer to Debt Service Fund Transfer to Capital Reserve

Total expenditures and other financing uses

Deficiency ofrevenues (under) expenditures

Fund Balance, July 1

Fund Balance, June 30

Reconcilation to Fund Financial Statements:

Fund balance, June 30, 2016 - budgetary- basis GAAP Basis Revenues not recognized Fund balance, June 30, 2016 - GAAP Basis

$

$

$

$

Current Year

552 552

2,773,307

552

2,773,859

(2,773,307)

3,227,034

453,727

453,727 (117,535)

336 192

89


F-la

Schedule of Project Revenues, Expenditures, Project Balance and Project Status (Budgetary Basis)

Bond Referendum - Various School Renovations

From Inception and for the year ended June 30, 2016

Revised Prior Current Authorized

Periods Year Totals Cost

Revenues and other financing sources Bond proceeds $ 47,633,000 $ 47,633,000 $ 47,633,000

State sources - SDA Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay

Total revenues and other financing sources 47,633,000 47,633,000 47,633,000

Expenditures and other financing uses Purchased professional and technical services 4,388,811 4,388,811 4,424,765

Construction services 38,550,664 38,550,664 39,385,398

Contingency 899,952 899,952 932,210

Other Objects 1,914,907 1,914,907 2,065,627

Transfer to Debt Service Fund 1,875,000 1,875,000 825,000

Total expenditures and other financing uses 47,629,334 47,629,334 47,633,000

Excess (deficiency) ofrevenues over (under) expenditures $ 3,666 $ 3,661i

Additional Project Information:

Project Number NIA

Grant Date NIA

Bond Authorization Date 912005

Bond Authorized $ 47,633,000

Bonds Issued 47,633,000

Original Authorized Cost 47,633,000

Revised Authorized Cost $ 47,633,000

Percentage Increase over Original Authorized 0%

Percentage Completion 100%

Original Target Completion Date 912007 Revised Target Completion Date Completed

90


F-lb


Knollwood Elementary School Boiler Replacement




Revenues and other financing sources Bond proceeds State sources - SDA $ 150,289 $ 150,289 $ 150,289

Proceeds from capital lease Transfer from capital reserve 239,085 239,085 239,085

Transfer from capital outlay Total revenues and other financing sources 389,374 389,374 389,374

Purchased professional and technical services Purchased professional and technical services 34,317 34,317 45,000

Construction services 323,474 323,474 344,374

Contingency Other Objects Transfer to Debt Service Fund

Total expenditures and other financing uses 357,791 357,791 389,374

Excess (deficiency) of revenues over (under) expenditures $ 31,583 $ 31,58::!


Project Number 3950-100-10-1002

Grant Date 9/8/2010

Bond Authorization NIA

Original Authorized Cost $ 398,475

Reduced Authorization - SDA Grant (9,101)

Reduced Authorization - Capital Reserve

Revised Authorized Cost $ 389,374



Original Target Completion Date 12/2011

Revised Target Completion Date Completed

91


F-lc


Mt. Tabor Elementary School Window and Door Replacement


Revennes and other financing sonrces Bond proceeds State sources - SDA Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay


Purchased professional and technical services Purchased professional and technical services Construction services Contingency Other Objects Transfer to Debt Service Fund


Excess (deficiency) ofrevenues over (under) expenditures


Project Number

GrantDate

Bond Authorization Original Authorized Cost Reduced Authorization - SDA Grant Reduced Authorization - Capital Reserve

Revised Authorized Cost

Percentage Increase over Original Authorized Percentage Completion Original Target Completion Date Revised Target Completion Date

Prior Periods

$ 243,751

396,174

639,925

548,000

548,000

$ 91,925

3950-100-10-1001

9/28/2010

NIA $

$

660,290 (20,365)

639,925

0% 100%

12/2011 Completed

Current Year Totals

$ 243,751

396,174

639,925

548,000

548,000

$ 91,925

Revised Authorized

Cost

$ 243,751

396,174

639,925

29,859 610,066

639,925

92


F-ld


Parsippany High School Partial Roof Replacement


Revenues and other financing sources Bond proceeds State sources - SDA Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay


Purchased professional aud technical services Purchased professional and technical services Construction services Contingency Other Objects Transfer to Debt Service Fund


Excess (deficiency) of revenues over (under) expenditures


Project Number

Grant Date




$

$

$

$

Prior Periods

108,300

108,300

78,332

78,332

29,968

NIA NIA NIA

108,300

108,300

0% 100%

1212011 Completed

Current Year

$

$

Totals

108,300

108,300

78,332

78,332

29,968

Revised Authorized

Cost

$ 108,300

108,300

108,300

108,300

93


F-le


Parsippany High School Fire Alarm System Upgrades








Project Number

Grant Date




Prior Current Periods Year Totals

$ 51,608 $ 51,608

77,412 77,412

129,020 129,020

121,134 121,134

121,134 121,134

$ 7,886 $ 7,886

3950-050-l 4-G2HH

8/28/2014

NIA $ 129,020

$ 129,020

0% 100%

12/15/2014 Completed

Revised Authorized

Cost

$ 51,608

77,412

129,020

129,020

129,020

94


F-lf


Parsippany Hills High School Fire Alarm System Uprgrades





Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay 122,040 122,040 122,040

Total revenues and other financing sources 203,400 203,400 203,400

Purchased professional and technical services Purchased professional and technical services Construction services 200,992 200,992 203,400 Contingency Other Objects Transfer to Debt Service Fund


Excess (deficiency) of revenues over (under) expenditures $ 2,408 $ 2,408


Project Number 3950-053-l 4-G2ill

Grant Date 8/28/2014

Bond Authorization NIA Original Authorized Cost $ 203,400

Reduced Authorization - SDA Grant Reduced Authorization - Capital Reserve




Original Target Completion Date 12/15/2014


95


F-lg


Brooklawn Middle School Fire Alarm System Upgrades








Project Number

GrantDate





$ 33,608 $ 33,608

50,412 50,412

84,020 84,020

78,934 78,934

78,934 78,934

$ 5,086 $ 5,086

3950-055-l 4-G2HJ

8/28/2014

NIA $ 84,020

$ 84,020

0% 100%


Revised Authorized

Cost

$ 33,608

50,412

84,020

84,020

84,020

96


F-lh


Central Middle School Fire Alarm System Upgrades








Project Number

Grant Date




Prior Periods

$ 33,608

50,412

84,020

84,020

84,020

3950-060-14-G2HK

8/28/2014

NIA $ 84,020

$ 84,020

0% 100%

12115/2014 Completed

Current Year Totals

$ 33,608

50,412

84,020

84,020

84,020

Revised Authorized

Cost

$ 33,608

50,412

84,020

84,020

84,020

97


F-li


East Lake Elementary School Fire Alarm System Upgrades, Roof Replacement





Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay 624,615 624,615 624,615

Total revenues and other financing sources 1,041,025 1,041,025 1,041,025

Purchased professional and technical services Purchased professional and technical services Construction services 831, 757 831,757 1,041,025


Total expenditures and other financing uses 831,757 831,757 1,041,025

Excess (deficiency) ofrevenues over (under) expenditures $ :209,268 $ 209,268


Project Number 3950-062- l 4-G2HL



Original Authorized Cost $ 1,041,025


Revised Authorized Cost $ 1,041,025





98


F-lj


Knollwood Elementary School Fire Alarm System Upgrades







Purchased professional and technical services Purchased professional and technical services Construction services 37,584 37,584 46,370



Excess (deficiency) ofrevenues over (under) expenditures $ 8,781J $ 8,781J


Project Number 3950-065-14-G2HM



Original Authorized Cost $ 46,370





Original Target Completion Date 1211512014


99


F-lk


Lake Parsippany Elementary School Partial Roof Replacement




Revenues aud other financing sources Bond proceeds State sources - SDA $ 98,639 $ 98,639 $ 98,639 Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay 147,959 147,959 147,959







Project Number 3950-080-13-G2HN









100


F-11


Lake Parsippany Elementary School Fire Alarm System Upgrades






Transfer from capital outlay 5,863 5,863 5,863







Project Number 3950-080-l 4-G2HO







Original Target Completion Date 1211512014 Revised Target Completion Date Completed

101


F-lm


Littleton Elementary School Fire Alarm System Upgrades


Revennes and other financing sonrces Bond proceeds State sources - SDA Proceeds from capital lease Transfer from capital reserve Transfer from capital outlay






Project Number

Grant Date





$ 15,360 $ 15,360

23,040 23,040

38,400 38,400

29,999 29,999

29,999 29,999

$ 8,401 $ 8,401

3950-090-14-G2HP

8/29/2014

NIA $ 38,400

$ 38,400

0% 100%


Revised Authorized

Cost

$ 15,360

23,040

38,400

38,400

38,400

102


F-ln


Mount Tabor Elementary School Fire Alarm System Upgrades




Revenues and other financing sources Bond proceeds State sources - SDA $ 15,030 $ 15,030 $ 15,030 Proceeds from capital lease Transfer from capital reserve 22,545 22,545 22,545 Transfer from capital outlay


Purchased professional and technical services Purchased professional and technical services Construction services 34,528 34,528 37,575 Contingency Other Objects Transfer to Debt Service Fund




Project Number 3950-100-14-G2HQ





Percentage Increase over Original Authorized 0% Percentage Completion 100%



103


F-lo


Rockaway Meadow Elementary School Fire Alarm System Upgrades








Project Number

Grant Date





$ 17,120 $ 17,120

25,680 25,680

42,800 42,800

34,668 34,668

34,668 34,668

$ 8,132 $ 8,132

3950-107-14-G2HR

8/29/2014

NIA $ 42,800

$ 42,800

0% 100%


Revised Authorized

Cost

$ 17,120

25,680

42,800

42,800

42,800

104


F-lp


Troy Hills Elementary School Fire Alarm System Upgrades








Project Number

Grant Date





$ 18,200 $ 18,200

27,300 27,300

45,500 45,500

36,329 36,329

36,329 36,329

$ 9,171 $ 9,171

3950-120-14-G2HS

8/29/2014

NIA $ 45,500

$ 45,500

0% 100%


Revised Authorized

Cost

$ 18,200

27,300

45,500

45,500

45,500

105


F-lq


Intervale Elementary School Fire Alarm System Upgrades








Project Number

Grant Date





$ 14,652 $ 14,652

21,978 21,978

36,630 36,630

30,291 30,291

30,291 30,291

$ b,339 $ b,339

3950-064-14-G2XI

8/29/2014

NIA $ 36,630

$ 36,630

0% 83%


Revised Authorized

Cost

$ 14,652

21,978

36,630

36,630

36,630

106


F-lr


Northvail Elementary School Fire Alarm System Upgrades




Revenues aud other financing sources Bond proceeds State sources - SDA $ 15,708 $ 15,708 $ 15,708






Excess (deficiency) ofrevenues over (under) expenditures $ 9,636 $ 9,636


Project Number 3950-103-l 4-G2XJ









107


F-ls


Lake Hiawatha Special Education School Fire Alarm System Upgrades








Project Number

Grant Date





$ 22,720 $ 22,720

34,080 34,080

56,800 56,800

49,151 49,151

49,151 49,151

$ 7,649 $ 7,649

3950-070-14-G2ZS

8/29/2014

NIA $ 56,800

$ 56,800

0% 87%


Revised Authorized

Cost

$ 22,720

34,080

56,800

56,800

56,800

108

F-lt



Energy Savings Improvement Plan








Project Number

Grant Date

Bond Authorization Original Authorized Capital Lease Cost Capital Lease Proceeds Reduced Authorization


Percentage Increase over Original Authorized Cost Percentage Completion Original Target Completion Date Revised Target Completion Date

$

$

$

$

Prior Periods

14,200,000

14,200,000

59,667 11,312,026

55,000

11,426,693

2,773,307

NIA

NIA NIA 14,200,000 14,200,000

14,200,000

0% 100%

613012015 Completed

$

$

Current Year

2,773,307

2,773,307

(2, 773,307)

Totals

$ 14,200,000

14,200,000

59,667 14,085,333

55,000

14,200,000

Revised Authorized

Cost

$ 14,200,000

14,200,000

59,667 14,085,333

55,000

14,200,000

109


F-lu


Parsippany- Troy Hills High School Building Upgrades








Project Number

GrantDate

Bond Authorization Original Authorized Capital Lease Cost Capital Lease Proceeds Reduced Authorization


Percentage Increase over Original Authorized Cost Percentage Completion Original Target Completion Date Revised Target Completion Date

$

$

$

Prior Periods

1,300,000

1,300,000

1,300,000

1,300,000

NIA

NIA NIA 1,300,000 1,300,000

1,300,000

0% 100%

613012015 Completed

Current Year Totals

$ 1,300,000

1,300,000

1,300,000

1,300,000

Revised Authorized

Cost

$ 1,300,000

1,300,000

1,300,000

1,300,000

110

Fiduciary Funds

Parsippany-Troy Hills School District Trust and Agency Funds

Combining Statement of Fiduciary Net Position

June 30, 2016

Agency

Student Total Unemployment Activity PaJ:roll Ag encl'. Coml!ensation

Assets Cash and cash equivalents $ 403,164 $ 3,090,489 $ 3,493,653 $ 1,692,722

Total assets $ 403 164 $ 3 090 489 $ 3 493,653 1,692,722

Liabilities Accounts payable 5,572 Due to student groups $ 403,164 $ 403,164 Payroll deductions and withholdings payable $ 715,428 715,428

Summer escrow payable 2,375,061 2,375,061

Total liabilities $ 403 164 $ 3 090 489 $ 3,493,653 5,572

Net position Held in trust for:

Unemployment compensation claims 1,687,150

Scholarships

Total net position $ 1687150

Trust Private Purpose

Scholarshil!

$ 59,192 $

59,192

59,192

$ 59192 $

Total Trust

H-1

1,751,914

1,751,914

5,572

5,572

1,687,150

59,192

1746342

111

Parsippany-Troy Hills School District Trust Funds

Combining Statement of Changes in Fiduciary Net Position


Unemployment Private Purpose Compensation Scholarship

Trust Fund Trust Fund

Additions: Contributions:

Employee contributions $ 179,996 Donations $ 28,060

Total additions 179,996 28,060

Deductions: Unemployment compensation 139,249 claims Scholarships awarded 30,900

Total deductions 139,249 30,900

Change in net position 40,747 (2,840)

Net position, beginning 1,646,403 62,032

Net position, ending $ 1,687,150 $ 59,192

H-2

Total Trust Funds

$ 179,996 28,060

208,056

139,249

30,900

170,149

37,907

1,708,435

$ 1,746,342

112

Assets Cash and equivalents

Total assets

Liabilities Due to student groups

Total liabilities

Parsippany-Troy Hills School District Student Activity Agency Fund

Schedule of Cash Receipts and Cash Disbursements


Balance July

1,2015 Cash Receipts Cash Disbursements

$ 373,234 $ 747,799 $ 717,869

$ 373,234 $ 747,799 $ 717,869

$ 373,234 $ 747,799 $ 717,869

$ 373,234 $ 747,799 $ 717,869

H-3

Balance June

30,2016

$ 403,164

$ 403,164

$ 403,164

$ 403,164

113

H-4 Parsippany-Troy Hills School District

Student Activity Agency Fund



Balance Cash Cash Balance July 1, 2015 Receipts Disbursements June 30, 2016

Elementary Schools: Eastlake $ 4,872 $ 4,075 $ 3,024 $ 5,923 Intervale 3,409 2,733 3,219 2,923 Knollwood 5,674 423 29 6,068 Lake Hiawatha 7,461 1,916 974 8,403 Lake Parsippany 1,565 12,906 11,887 2,584 Littleton 4,765 2,985 2,953 4,797 Mt. Tabor 5,173 4,350 5,104 4,419 Northvail 5,111 1,841 983 5,969 Rockaway Meadow 2,195 3,904 3,565 2,534 Troy Hills 11,374 1,857 1,239 11,992

Total Elementary Schools 36,990 32,977 55,612

Middle Schools: Brooklawn 56,959 146,373 130,972 72,360 Central 45,542 111,902 114,613 42,831

Total Middle Schools 102,501 258,275 245,585 115,191

High Schools: Parsippany High 72,009 167,218 159,831 79,396 Parsippany Hills High 101,112 190,830 178,973 112,969

Total High Schools 173, 121 358,048 338,804 192,365

Athletic Accounts: Parsippany High 6,259 44,193 50,303 149 Parsippany Hills High 650 45,631 43,724 2,557

Total Athletic Accounts 6,909 89,824 94,027 2,706

Total Other Accounts 39,104 4,662 6,476 37,290

Total All Schools $ 373,234 $ 747,799 $ 717,869 $ 403,164

114

Parsippany-Troy Hills School District Payroll Agency Fund



Balance July

1,2015 Cash Receipts Cash Disbursements

Assets Cash and cash equivalents $ 3,015,244 $ 95,205,730 $ 95,130,485

Total assets $ 3,015,244 $ 95,205,730 $ 95,130,485

Liabilities Payroll deductions and withholdings $ 739,272 $ 92,837,859 $ 92,861,703

Summer escrow payable 2,275,972 2,367,871 2,268,782

Total liabilities $ 3,015,244 $ 95,205,730 $ 95,130,485

H-5

Balance June

30,2016

$ 3,090,489

$ 3,090,489

$ 715,428 2,375,061

$ 3,090,489

115

Long-Term Debt

I-1 Parsippany-Troy Hills School District

Long-Term Debt

Schedule of Serial Bonds Payable

Year Ended June 30, 2016

Maturities of Bonds Outstanding Balance Balance

Date of Orie:inal June 30, 2016 Interest June June Puri~ose Issue Issue Date Amount Rate 30,2015 Retired 30,2016

School Improvements 8/15/06 $47,633,000 8/15/16 $ 1,900,000 4.375% $ 3,700,000 $ 1,800,000 $ 1,900,000

2014 Refunding Bonds 4/24114 19,715,000 8/15/17 1,950,000 3.000% 8/15/18 2,025,000 4.000% 8/15/19 2,115,000 4.000% 8/15/20 2,205,000 4.000% 8/15/21 2,240,000 4.000% 8/15/22 2,240,000 5.000% 8/15/23 2,250,000 5.000% 8/15/24 2,255,000 5.000% 8/15/25 2,265,000 5.000% 19,545,000 19,545,000

2015 Refunding Bonds 2/26/15 12,025,000 8/15/26 2,070,000 5.000% 8/15/27 2,070,000 5.000% 8/15/28 2,070,000 5.000% 8/15/29 2,065,000 5.000% 8/15/30 2,060,000 5.000% 8/15/31 1,690,000 5.000% 12,025,000 12,025,000

$ 35 210 000 $ 1 800 000 $ 33 410 000

116

Interest Pur~ose Rate

Equipment 2.75% $ Equipment 2.75% Equipment 2.75% Equipment 1.48% Equipment 1.13%

Energy Savings Improvement Plan 2.66%

Equipment 2.10% Equipment 1.56% Equipment 0.00% Equipment 0.00% Equipment 1.50%

Parsippany-Troy Hills School District Long-Term Debt

Schedule of Obligations Under Capital Leases


Amount of Original Balance

Issue Jull'.1, 2015 Issued

1,005,000 $ 206,531 1,005,000 410,179 1,005,000 611,215 1,300,000 808,177

372,899 186,437 14,200,000 14,200,000

1,005,000 787,781 1,200,000 1, 189,367

532,697 399,523 1,370,893 $ 1,370,893 1,000,000 1,000 000

$ 18 799 210 $ 2 370 893

I-2

Balance Paid June 30, 2016

$ 206,531 203,733 $ 206,446 200,962 410,253 198,890 609,287 92,693 93,744

237,000 13,963,000 260,621 527,160 200,000 989,367 133,174 266,349 342,723 1,028,170

99 742 900,258 $ 2 176 069 $ 18 994 034

117

1-3

Parsippany-Troy Hills School District Debt Service Fund

Budgetary Comparison Schedule


Variance Original Budget Final Final Budget Transfers Budget Actual to Actual

Revenues: Local sources:

Local tax levy $ 2,788,077 $ 2,788,077 $ 2,788,077 State sources:

Debt service aid type II 568,629 568,629 568,629 Total revenues 3,356,706 3,356,706 3,356,706

Expenditures: Principal on bonds 1,800,000 1,800,000 1,800,000 Interest on bonds 1,557,779 1,557,779 1,557,778 $

Total expenditures 3,357,779 3,357,779 3,357,778

(Deficiency) excess of revenues (under) over expenditures (1,073) (1,073) (1,072)

Other financing sources:

Interest earned in capital projects fund 552 552 Total other financing sources 552 552

(Deficiency) excess ofrevenues (under) over expenditures and other financing sources (1,073) (1,073) (520) 553

Fund balance, July I 37,829 37,829 37,829 Fund balance, June 30 $ 36 756 $ $ 36 756 $ 37 309 $ 553

118

Statistical Section

(Unaudited)

Statistical Section Unaudited

Contents

Financial Trends

These schedules contain trend information to help the reader understand how the district's financial performance and well being have changed over time.

Revenue Capacity

These schedules contain information to help the reader assess the district's most significant local revenue source, the property tax.

Debt Capacity

These schedules present information to help the reader assess the affordability of the district' s current levels of outstanding debt and the district's ability to issue additional debt in the future.

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the district's financial activities take place.

Operating Information

These schedules contain service and infrastructure data to help the reader understand how the information in the district's financial report relates to the services the district provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports (CAFR) for the relevant year. The district implemented GASB Statement 34 in the fiscal year ended June 30, 2003.

2007 2008

Governmental activities Net investment in capital assets 211,252,572 14,924,006 Restricted 9,308,158 18,769,182 Unrestricted (deficit) (2,854,006)

Total govcnuncntal activities net position 26 706 724

Business-type activities Net investment in capital assets 116,893 143,614 Unrestricted 86 IOI 74 254

Totnl busincsHypc activities net position 202 994 217,868

Govemment-widc Netinvestmentincnpitnlnssets 20,369,465 $ 15,067,620 Restricted 9,308,158 18,769,182 Unrestricted(deficit) (2,767,905) (2,053,949)

Total district net position 26 909 718 $ 31 782,853

Source: CAFR Schedule A~I atld District records.

2009

$ 211,322,542 12,588,400 (2,134,030)

$ 30776912

175,722 116 446 292 168

20,498,264 12,588,400 (2,017,584) 31,069 080

Pnrsipprmy-Troy Hills School District Net Position by Component

Last Ten Fiscal Years (accmal basis of acco1111ti11g)

Unaudited

June 30, 2010 2011

$ 22,926,163 26,048,380 9,295,591 8,939,059

(1,967,791) (2,081,659) $ 30,253 963 32,905 780

182,101 179,208 201 553 246165 383,654 425 373

$ 23,108,264 26,227,588 9,295,591 8,939,059

(1,766,238) (1,835.494) $ 30637617 33,331 153

Note: GASS 63 was implemented in the 2013 fiscal year, which required the reclassification of balances previously reported as net assets to net position. 2014 was restated in 2015 to reflect n District-wide capital assets appraisal. 2015 Business-type activities include the adult school program, previoulsy accounted for in the General Fund.

2012 2013 2014 2015

27,005,258 $ 26,440,800 11,372,718 $ 18,025,158 6,719,424 8,459,009 10,621,377 10,500,851

989 401 4 839 908 4 ()()() 475 (37,452,068) 34,714,083 $ 39 739 717 25,994,570 $ (8,926,059)

244,661 322,111 520,820 568,799 235 887 259 755 307 418 I 118 984 480,548 581,866 828,238 1687,783

27,249,919 $ 26,762,911 11,893,538 $ 18,593,957 6,719,424 8,459,009 10,621,377 10,500,851 I 225 288 5 099 663 4 307 893 (36,333,084)

35,194,631 $ 40,321,583 26 822,808 $ (7,238,276)

GASS 68 was implemented during the 2015 fiscal year, which required the restatement of beginning net position in the amount of ($39,991,097). This amount is not reflected in the June 30, 2014 Net Position, above.

J-1

2016

$ 22,246,363 5,164,320

(38,481,590) $ (11,070,907)

608,450 I 543 153 2151 603

$ 22,854,813 5,164,320

(36,938,437) $ (8,919,304)

119

Expcn'c~ Go\'cmmenlnlnctil'itics

lns1ruction Rcgu!nr SpcdnlEdurnthlll Othcrln~ruc1ion

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To1nl Dbtrict

Sourcc:Dislrictrccords

2007

s 48,167.024 10,038,034 4,001,696 2,370,392

7,838,140 16,569.596

J.535,373 5,511.933 1,992,289

975,446 10,767,928 6,578,651

872,128 1,811.220

2,223.583

2.223.583 s 123.120.640

53,427 1.440,854

20,410,941 131,062

s 22,036.284

1,821.255

2008

49,679,045 ll.071,579 4,117,984 2.410.202

8,068,232 17,994,928

1,019,012 5,179,099 2,003,582 !,729,363

11,905,3<12 6,616,979

991,992 1,795,874

101,737 2,119,!45 l,027.319

!27,831,414

2,238,925

2.238,925 130.070.339

124,128 1,875,676

20,879,132 157,413

23,036.3<19

1,784,95!

20(19

50,879,509 10,770,018 4,135,992 2,446,60-1

8.219,763 18,592,041 1,346.484 6,177,907 2,281,598 l,0!0,!05

11,666,344 6,660,792 1,023,26(1 1,475,094

89,288 2,076,653 1,284679

IJ0.136.137

2,194,422

2,194422 \J2,330,559

162,070

J,696,439 16,!90,504

25!.809 18,300,822

1,783,069

l'ursippuny·TroyHi!lsSchoolDi~trict

Chongcs in NL1 Po~·ition, Ln~·t Ten Fi~cnl Y~iir~ (11cc11111/baslsoft1ccm111//11g)

Unaudited

\'rarl•ntlrd.Jum•JO, 2010

51,971,182 ll,354,873 4.469.379 2.468.444

8,619,040 !9,619,802 !,IM,924 6,091,86! 2,435,522

964,932 ll,718,Ll9 7,170,884

905,430 l,561,6!1

133,619 2,026,635 1,327,<176

134,003,753

2,279,417

l83,60J

2011 2012

52,549,584 s 12,654,225 4,240,729 2,474,035

8,761,!80 19,596,193

963,155 6,255,485 2,272,678

893,122 I0,5!7,142 6,140,864

442,538 l,673,.t57

160,727 2,974.627 \,369,785

133.939.426

2,211,868

53,.l20,040 12,830,312 4,359,857 2,627.716

9,157,295 21,527,642

1,207,241 6,496,651 2,107,571

797,503 I0,921,748 7,183,376

1,805,198 285,780

1,750,922

136.378,852

2,326,674

2013

54,157,270 13,587,574 4,981,003 2,759,0-111

8,690,359 21,8119,1134

955,550 6,781,852 !,988,419

934,!41 11,334,513 7,128,369

1,800,842 359,963

1,828,112

139.176.849

2,152,061

2,152061 1-11.328.9!0

2014

55,225,305 14,182,455 4,748.278 2,780,564

9,133,292 22,698,468

951,226 7,039,916 2,359,0?R

894,481 11,702,498 7,392,761

1,780,9-13 385,109

1,721,809

142,996,183

2,195,791

240,890 S 336,014 .B6,408 288,409 1,816,985 l,661,H.21 l.952,286 2,095,236 2,023,902

15,272.528 14,557,527 2,309,757 2,401,594 2,087,374

2015

60,058.776 15,759,413 5.318.379 3,1<18,624

8,927,366 25,166,820

987,.Jll 7,216.319 2,601,763 2,0J0,378

14,561,451 7,799,413

1,666 343,519

2,048,3119

155,949,687

2,474,.170 2.015.253 4489,723

160,439.-110

216,llC1

J-2

2016

67.327,824 17,54-t,548 4,J.JS,0-14 3,611,060

9,723,979 30,!73,89)

l.365,393 7,300,094 2.637,523 2.417,212

15,682,039 7,879,781

338,426 l,118,186

171.465000

2,529.796 2103524 4,633,320

176.098.J20

281,529

2,788,827

J,!44.458 40-t.O-tl 407,602 J=:=:illm!t 17.273,116 !7604696 ~'--="0=0=2,0="= ~--='="=3,2="= ~~-~'·='o~"="~ ~--=3·'='°=-3="='

1,825,265 1,1115,329 S 1,820,456 1,639,914 1,684,107 1,772,352 2,878,501

l,748,269 2,609,04!

-~~~ --~2_4"'2~"'"~:<-,,~~c--; __ ___-,-:'-="-'--- --~2.7;~"':."'~~7-~ 2,;~~:~~~ ~,--~2.~=~~4=4:~=1~~=. ---==-- ---2_=;~=;:~=~4=, ---,,'=3~=~-~=~~= ~--c--"'-"""'---

s 2-t,235.799 20.500.408 19,6J.1,810 19.934.551

s (98,860,773) s (10-1,795,065) s (lll,835,315) s (116,730,637) s (116,334,730) s --="~'·o="~' ---~(2.~3.9=30~) ---~'·'="= ---~·~2.~27~7 117,987

s (98,l\8-t.841) s

s 100,2!0,723 J,081,825 1,387,280 1,563,!78

297,442

(10,997)

104.529451

'58

{!04.!\18.995) s

104,320,412 744,261)

1,872,919 2,365,50-1

388,386

(38,155)

109,653,326

6-t9

(lll.830,!5!) s

107,986,991 766,297

1,912,146 276,198 127,603

(2!.992)

lll,O-t7,243

318

{116.648.J(I{)) s (1!6,216,7-t]) s

ll!,498,().19 2,583,484 !,485,655

94,085 555,424

(9.009)

116.207,688

200

115.157,971 2,664,792

716,732 77,310

292,535

77.207

118,986,547

9J9

7.396,704

(131,376,754) s (17.932

/l3l.JOU22) S

114.831,204 2,355.480

13,765,153 45,399 96,908

13.518

131,107,662

76!

7,053,677

(!34,343,(ill) s 68.37S

(IJ4.275.233l s

!17,978,486 2.432,893

18,161,6!5 40,140

337,075 430,889 (11.853)

139.3692<15

768 20,319

7.116,848

038,188,896) s ll.t770

(138,075,126) s

120,740,876 2,511,028

16,374,275 lJ,816

654,483

{2069)

!40,292.409

8.106,066

(153,192,889) s 859,545

8.lfl7 496

(168,394,6·14) 463,820

{ l 52,33J.3-t4} ='''--=''"'' ""''-''")30,.8,,;2',,.l

!22,152,214 2,784.536

31,151,966 69.l

!05,326

156,194,735

125.598,736 2.788,077

37,599,05! 2,990

260,942

166.249796

--~'=0.9~97~ ---~'='·~"~' ---~2=1.9~92~ ----'='-0=09~ ---='=7J=.2=0JL) ---~(1~3,5~18~) ---~"=-'="- ----~2=,0=69_ ------ -----

--~'='-'='~' ---~'='-'="'~ ---~2=2,.l=lO~ ----'='-'=09_ ---~'="=·'=''L' ---~'="=-'="L' ---~-'2=.9-t=O- ----~'=·0=(>9- ------ ------

s 104,540,906

5,668.678 02.6\J)

5.656,065

109,692,IJ()

4,858.261 !4,874

4.873.135

111.069.553

(788,072) s 27,474

(760.598) s

116.216,897

(431.463) s

118.910.219 ... s.._-"13~1.=°'='-'='°==' ===-='=39=-'=°'=·'="- -'-~"=0.2=°'=·'="= ==---''"'"'=-1~"=·'-="- =-~1'='·="=9.7~"~·

2,651,8!7 s 41,7!9

2,693536 s

(269,092) S 5,025J,J4 2,103,5lJ 3,001,846 (2.144,848) 55,175 101.318 115,839 859.5-t5 46.l820

(213.917) ='=-=--''=·'=26=9'=·2_ ...... _ .. 2.,.2 .. 19 ... 3 .. 52_ "''---"'3'="=1.3=9==' ===-='"'1.6"'''=1 o~"~'

GASB 63 wns itnp!cmcnted in the 2013 fisrnl year, which required the rccfassiticntion ofbnlnnccs prc\·iously reported ns net as~cts !o net posi1ion.

120

Parsippany-Troy Hills School District Fund Balances, Governmental Funds

Last Ten Fiscal Years (mod{fied accrual bm-is of acc01m1i11g)

Unaudited

June JO, 2007 2008 2009 2010 2011

General Fund Reserved/Restricted $ 6,350,307 $ 9,382,087 8,538,275 8,041,629 7,003,336 Assigned 1,966,726 Unassigned 2,379,650 Unreserved 3,998,775 2,552 283 2 412,467

Total general fund 10,349,082 11,090 558 10,454,096 11,349,712

All Other Governmental Funds Restricted $ 27,952,035 $ 4,052,255 2,679,749 735,639 1,063,680 Unassigned (deficit) (41,015) Unreserved, Reported In:

Capital projects fund 6,028,587 3,218,297 920,402 180,041 Debt service fund 682 278 1,022,371 12 179 19,489

Total all other governmental funds 34,662,900 8,292,923 3,612 330 935,169 1,022,665

Total All Funds $ 21,083,366 14,702,888 11,389,265

Source: CAFR Schedule B-l and District records.

The change in the reserved fund balance is the result of capital project fund expenditures incurred for projects in which the funding was received in prior years through the issuance of bonds.

This table was required with the implementation of GASB 44 in the 2005 fiscal year. This information is presented back to the year of implementation of GASB 34 and additional years will be added until ten years.

GASB 54 was implemented in the 2012 fiscal year, which required the presentation of fund balances to be reported in different classifications

2012

6,561,945 1,464,329 2,177,866

10,204,140

861,145

861,145

11,065,285

from those presented in prior years. (See footnote l in the basic financial statements). Prior years have not been restated above, nor are they required to be.

J-3

2013 2014 2015 2016 (as restated)

7,951,867 9,713,770 10,164,659 4,828,128 4,679,708 3,633,704 3,205,980 3,802,392 2,686, 143 2,759,671 2,685,084 2,449,794

$ 15,317,718 16,107,145 16,055,723 11,080 314

509,338 $ 12, 100,903 3,147,328 373,501

509,338 12,100,903 3,147,328 373 501

$ 15,827,056 28,208,048 19,203,051

121

J-4

Pnrsippuny-Troy Hills School District Chnnges in Fund Bnlunccs, Governmental Funds

Lust Ten Fiscul Yeurs

!Jnuudited

Ycnr ended June 30,

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (as restated)

Revenues Tax levy l 01,292,548 l 05,064,672 108,753,288 114,081,533 117,822,763 117,186,684 120,411,379 123,251,904 124,936,750 128,386,814 Interest Earned on reserves 17,368 9,363 9,777 4,511 4,698 2,286 1,294 5,000 641 2,990 Miscellaneous 3,386,749 4,773,868 2,282,203 2,679,306 2,302,668 2,480,810 2,843,613 2,992,863 360,040 567,041 State sources 19,763,554 20,617,320 16,175,007 14,420,722 12,346,912 13,983,424 18,230,758 16,888,358 18,479,058 20,547,750 Federal sources 2,116,513 2,262,607 2,149 782 2 303,741 4,036,994 2,443,038 2,296 403 1,963,640 2,101,583 2,678,852

Total revenue 126,576,732 132,727 830 129,370 057 133,489,813 136,514,035 136,096,242 143,783 447 145,101,765 145,878,072 152,183,447

Expenditures Instruction

Regular and special educ instruct. 35,057,295 37,167,845 38,969,236 39,381,191 39,611,735 38,093,643 37,666,229 38,751,056 37,702,859 40,039,248 Special Education Instruction 7,270,481 7,718,948 8,134,428 8,478,729 9,885,294 9,282,035 9,594,060 10,061,739 10,152,000 10,899,360 Other Instruction 2,843,855 3,019,629 3,125,853 3,321,850 3,131,972 3,087,861 3,426,107 3,301,429 3,288,987 3,412,509 School-Sponsored Instruction 1,847,599 1,873,265 1,922,526 1,959,883 1,959,090 1,992,630 2,062,973 2,079,676 2,125,281 2,341,778

Support Services: Tuition 7,838,140 8,068,232 8,219,763 8,619,040 8,761, 180 8,958,958 8,804,359 9,217,629 8,927,366 9,719,962 Student Service 11,151,534 12,207,485 10,209,868 10,978,064 11,029,504 12,107,814 12,141,029 12,626,735 11,917,449 12,718,187 Student & lntstruction Related Service 1,409,519 850,393 4,531,483 4,320,904 3,978,174 3,799,859 3,657,933 3,906,220 4,480,159 6,298,685 General Administration 998,841 1,550,661 1,040,958 888,499 886,793 1,085,949 833,270 860,115 793,255 1,091,645 School Administration 4,298,379 1,585,170 4,816,887 4,524,606 4,616,791 4,694,512 4,816,528 5,092,002 4,622,005 4,410,527 Central Services 1,484,723 4,498,874 1,685,028 1,637,641 1,637,544 1,573,062 1,428,299 1,710,503 1,714,308 1,631,073 Administrative Information T ec\mology 783,914 788401 883,790 823,754 754,861 640,210 773,555 751,374 1,505,088 1,678,728 Plant Operations & Maintenance 8,741,859 9,831,091 9,860,863 9,673,943 8,693,102 8,313,218 8,695,511 9,211,480 10,636,370 11,233,188 Pupil Transportation 6,099,104 6,070,520 6,148,902 6,626,853 5,661,933 6,600,429 6,417,563 6,629,720 6,822,465 6,659,821 Business & Other Support Services Unallocated Benefits 27, 730,869 26,979,193 24,299,659 26,293,718 26, 795,395 29,149,709 31,073,806 30,156,485 31,330,454 34,681,213

Debt service: Principal 430,000 950,000 1,185,000 1,200,000 1,250,000 1,350,000 1,500,000 1,600,000 3,371,565 1,800,000 Interest 1,120,280 2,119,145 2,076,653 2,026,635 1,973,041 1,916,166 1,853,823 2,030,538 1,507,119 1,557,778

Cost oflssuance 146,300 Capital outlay 16,558,422 30,784,296 8,046,825 5,350,781 4,151,440 3,684,818 3,539,862 9,339,852 15,184,910 11,791,448 Charter school 101,737 89,288 133,619 160,727 285,780 359,963 385,109 343,519 338,426 Special Schools 1,412 428 1,458,136 1,486 532 1,559,717 1,674,554 l,805,199 1,800 842 1,721,809 1,666 Total expenditures 137,077,242 157,623,021 136,733 542 137,799,427 136 613,130 138,421,852 140,445 712 149,433,471 156,573, 125 162,303,576 Excess (Deficiency) of revenues

over (under) expenditures (I 0,500,510) (24,895,191) (7,363,485) (4,309,614) (99,095) (2,325,610) 3,337,735 (4,331,706) (10,695,053) ( l 0, 120, 129)

Other financing sources (uses) Capital leases (non-budgeted) 791,940 1,005,000 1,005,000 1,005,000 1,005,000 1,005,000 1,005,000 15,577,899 1,543,756 2,370,893 Bond proceeds 47,633,000 19,715,000 12,025,000 Premium on bonds 2,808,788 2,712,779 Payment to escrow agent (22,334,260) (14,591,479) Insurance proceeds 430,889 Transfers in 1,645,763 2, 179,802 2,557,839 45,998 89,443 473,119 350,895 1,612,942 50,052 552 Transfers out (l,656,760) (2,217,957) (2,579,831) (55,007) (12,236) (459,601) (362,748) (1,615,011) (50,052) (552)

Total other financing sources (uses) 48,413,943 966,845 983 008 995,991 1,082,207 1,018,518 1,424 036 15,765,358 1,690,056 2,370,893

Net change in fund balances 37,913,433 (23,928,346) (6,380,477) (3,313,623) 983,112 (1,307,092) 4,761,771 11,433,652 (9,004,997) (7,749,236)

Debt service as a percentage of noncapital expenditures 1.29% 2.42% 2.53% 2.44% 2.43% 2.42% 2.45% 2.59% 3.45% 2.23%

Soul'ce: CAFR Schedule I3·2

122

J-5

Parsippany-Troy Hills School District General Fund Other Local Revenues by Source

Last Ten Fiscal Years Unaudited

Adult Education

Fiscal Year and Regular Ended June 30, Interest Tuition* Rentals Refunds Other Total

2007 $ 520,357 $ 1,494,281 $ 55,994 $ 230,291 $ 11,158 $ 2,312,081 2008 425,411 1,999,804 38,454 285,314 64,618 2,813,601 2009 177,898 1,724,000 37,946 224,165 2,164,009 2010 86,775 2,000,590 64,826 490,596 2,642,787 2011 74,609 2,031,360 58,484 105,402 2,269,855 2012 44,098 2,288,300 46,886 50,022 2,429,306 2013 39,245 2,431,644 53,312 283,763 2,807,964 2014 12,743 2,312,311 57,029 296,302 2,678,385 2015 641 216,116 39,491 65,835 322,083 2016 2,438 281,529 36,669 77,501 146,771 544,908

Source: District records.

* During the 2015 fiscal year, the District moved it Adult Education Program into a separate Enterprise Fund, resulting in a decrease in miscellaneous revenue in the general fund, which was offset with a reduction in general fund expenditures.

123

Fiscal Year

Ended June 30, Vacant Land Residential Fann Reg.

2007 $112,099,100 $ 4,323,446,400 $ 326,400 $ 2008 103, 134,600 4,365,430,400 326,400 2009 89,270,400 4,385,585, 100 326,400 2010 78,507,700 4,405,406,300 326,400 2011 77,607,500 4,408,878,400 326,400 2012 72,717,000 4,405,119,200 326,400 2013 66,904,400 4,403,242,200 326,400 2014 68,028,800 4,391,472,200 326,400 2015 67,577,600 4,399,306,700 326,400 2016 67,209,400 4,405,575,800 326,400

Qfann Commercial

3,100 $2,433,467,700 $ 3,100 2,362,622,800 3,100 2,306,569,900 3,100 2,246,593,800 3,100 2, 198,373,300 4,400 2,131,211,300 4,400 2,070,234,400 4,400 2,053,077,500 8,900 2,045,286,500 8,900 2,039,260,500

Parsippany-Troy Hills School District Assessed Value and Actual Value of Taxable Property

Last Ten Fiscal Y cars

Unaudited

Total Assessed Industrial Apartment Value

318,309,500 $ 390,048,000 $ 7,577,700,200 314,532,200 389,588,700 7,535,638,200 314,532,200 390,988, 700 7,487,275,800 282,858,500 390,988, 700 7,404,684,500 258,335,800 390,988,700 7,334,513,200 250,480,800 390,988,700 7,250,847,800 254,664,800 401,241,700 7,196,618,300 250,009,200 403,241,700 7,166,160,200 244,410,200 403,241,700 7,160,158,000 241,396,100 407,631,100 7, 161,408,200

Source: District records, Tax list summary & Municipal Tax Assessor and Collector, abstract ofratables, County Board of Taxation.

Note: Real property is required to be assessed at some percentage of true value (fair or market value) established by each county board of taxation.

Reassessment occurs when ordered by the County Board of Taxation.

a Taxable Value of Machinery, Implements and Equipment of Telephone, Telegraph and Messenger System Companies.

b Tax rates are per $100 of assessed value.

J-6

Total Direct Estimated Actual

Less: Tax-Exempt Net Valuation School (County Equalized Property Public Utilities . Taxable Tax Rate• Value)

$ 481,727,700 $ 10,582,176 $ 7 ,588,282,3 7 6 $ 1.36 $ 9,324,833,790 485, 730,900 10,448,091 7,546,086,291 1.42 9,666,126,163 581,936,200 10,866,942 7,498,142,742 1.50 9,699,800,233 584,988,900 11,066,916 7,415,751,416 1.57 9,332,851,651 585, 116, 700 12,432,565 7,346,945,765 1.66 9,082,278,672 585,077,700 12,432,565 7,263,280,365 172 8,467,896,741 576,340,400 10,643,519 7,207,261,819 1.69 8,418,714,892 576,340,400 10,643,519 7,176,803,719 l.73 8,489,705,248 592,396, l 00 422,050 7, 160,580,050 l.81 8,482,594,479 541,694,900 422,000 7,161,830,200 1.85 8,506,908.491

124

Fiscal Year Ended December 31,

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source:


Propetiy Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years

(rate per $100 of assessed value) Unaudited

Parsippany Troy Hills Schools Overlapping Rates

General Obligation Township

Debt Service of Morris Basic Rate a b Total Direct Parsippany County

$ 1.35 $ 0.01 $ 1.36 $ 0.49 $ 0.29 1.41 0.01 1.42 0.51 0.30 1.47 0.03 1.50 0.54 0.30 1.53 0.04 1.57 0.58 0.30 1.60 0.06 1.66 0.54 0.30 1.66 0.06 1.72 0.56 0.28 1.66 0.03 1.69 0.61 0.30 1.69 0.04 1.73 0.87 0.26 1.77 0.04 1.81 0.92 0.25 NIA NIA NIA NIA NIA

District Records and Municipal Tax Collector

J-7

Total Direct and

Overlapping Tax Rate

$ 2.14 2.23 2.34 2.45 2.50 2.56 2.60 2.86 2.98 NIA

a The district's basic tax rate is calculated from the A4F form which is submitted with the budget and the Net valuation taxable.

b Rates for debt service are based on each year's requirements.

NI A Not available.

125

Taxpayer

Knoll Manor Associates Morris Corporate Center, HDQ III Morris Corporate Center, HDQ I & II Powder Mill Heights NJ Kimball, LLC Sylvan/Campus Rlty, LLC MCC IV - Phase I, LLC Troy Hills Village Wells REIT- Multi State Wyndham Worldwide Total

Net Assessed Value

Source: Municipal Tax Collector

$

$

Parsippany-Troy Hills School District Principal Property Tax Payers

Current Year and Nine Years Ago Unaudited

2016 Taxable % of Total Assessed District Net

Value Assessed Value Taxpayer

61,015,400 0.85% Morris Corporate Center, HDQ I & II 58,875,100 0.82% State Farm Insurance 57,660,700 0.81% Morris Corporate Center, HDQ III 51,831,300 0.72% Cendant 49,544,700 0.69% Parsippany Hilton 49,101,800 0.69% Morris Corporate Ctr. IV, Phase II 43,526,900 0.61% Knoll Manor Associates 41,506,500 0.58% Wells Reit - Gatehall II 40,677,800 0.57% Benenson Par LLC - NY Life Ins. 39,807,200 0.56% Starwood Realty - Tara

493,54 7,400 6.89%

$7,161,830,200

J-8

2007 Taxable % of Total Assessed District Net

Value Assessed Value

$ 95,660,700 1.26% 82,500,000 1.09% 70,875,100 0.93% 67,268,000 0.89% 64,762,300 0.85% 63,107,000 0.83% 61,015,400 0.80% 58,677,800 0.77% 54,080,500 0.71% 53,971,200 0.71%

$ 671,918,000 8.85%

$ 7,588,282,376

126

Fiscal Year Ended June 30,

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source:

Note:

Parsippany-Troy Hills School District Property Tax Levies and Collections


Collected within the Fiscal Year of the Levy

J-9

Taxes Levied for Percentage of Collections in the Fiscal Year Amount Levy Subsequent Years

$ 101,292,548 $ 101,292,548 100.00% 105,064,672 105,064,672 100.00% 108,753,288 108,753,288 100.00% 114,081,533 114,081,533 100.00% 117,822,763 117,822,763 100.00% 117,186,684 117,186,684 100.00% 120,411,379 120,411,379 100.00% 123,251,904 123,251,904 100.00% 124,936,750 124,936,750 100.00% 128,386,814 128,386,814 100.00%

District records including the Certificate and Report of School Taxes (A4F form)

School taxes are collected by the Municipal Tax Collector. Under New Jersey State Statute, a municipality is required to remit to the school district the entire property tax balance, in the amount certified prior to the end of the school year.

127

Fiscal Year

Ended June

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Parsippany-Troy Hills School District Ratios of Outstanding Debt by Type


Governmental Activities

General Obligation

Bonds Capital Leases Total District

$48,518,000 $ 2,176,220 $ 50,694,220 47,568,000 2,553,060 50,121,060 46,383,000 2,721,823 49,104,823 45,183,000 2,923,428 48,106,428 43,933,000 3,004,835 46,937,835 42,583,000 3,045,125 45,628,125 41,083,000 3,042,587 44,125,587 38,848,000 18,567,079 57,415,079 35,270,000 18,798,211 54,068,211 33,470,000 18,994,034 52,464,034

J-10

Percentage of Personal Per Capita Income ('a) ('a)

1.41% $ 1,016 1.35% 1,005 1.39% 982 1.24% 903 1.15% 878 1.08% 851 1.04% 821 1.29% 1,070 1.22% 1,008 1.18% 978

Source: School District Financial Reports

Note: Details regarding the district's outstanding debt can be found in the notes to the basic financial statements.

a See J-14 for personal income and population data. These ratios are calculated using per capita income and population for the prior calendar year.

128

Fiscal Year Ended June 30,

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source:

Note:

a

b

J-11 Parsippany-Troy Hills School District

Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years

Unaudited

General Bonded Debt Outstanding

General Net General Percentage of

Obligation Bonded Debt Net Valuation

Bonds Deductions Outstanding Taxable ('a) Per Capita (bl

$ 48,518,000 $ 48,518,000 0.64% $ 1,016 47,568,000 47,568,000 0.63% 1,005 46,383,000 46,383,000 0.62% 982 45,183,000 45,183,000 0.61% 903 43,933,000 43,933,000 0.60% 878 42,583,000 42,583,000 0.59% 851 41,083,000 41,083,000 0.57% 821 38,848,000 38,848,000 0.54% 1,070 35,270,000 $ 37,829 35,232,171 0.49% 1,008 33,470,000 37,309 33,432,691 0.47% 978

School District Financial records

Details regarding the district's outstanding debt can be found in notes to the basic financial statements.

See Exhibit J-6 for property tax data. This ratio is calculated using valuation data for the prior calendar year. See Exhibit J-14 for population data. This ratio is calculated using population data for the prior calendar year.

129

Parsippany-Troy Hills School District Ratios of Overlapping Governmental Activities Debt

As of December 31, 2015 Unaudited

J-12

Debt Authorized and Outstanding

Estimated Percentage

Applicable a

Estimated Share of Overlapping Debt

Debt repaid with property taxes

Township of Parsippany $ Morris County General Obligation Debt

77,871,723 226,745,317

100.00% $ 9.27%

77,871,723 21,019,291

Subtotal overlapping debt 98,891,014

Parsippany-Troy Hills School District Direct Debt 33,470,000

Total direct and overlapping debt $ 132,361,014

Sources: Assessed value data used to estimate applicable percentages provided by the Morris County Board of Taxation; debt outstanding data provided by each governmental unit.

Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the District. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Parsippany-Troy Hills. This process recognizes that, when considering the District's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping payment.

a For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of ParsippanyTroy Hills Township's equalized property value that is within the Morris County's boundaries and dividing it by Morris County's total equalized property value.

130

Parsippany-Troy Hills School District Legal Debt margin lnfonnation

Last Ten FiscaJ Years Unaudited

LegaJ Debt Margin Calculation for Fiscal Year 2016

2007 2008 2009 2010

Debt limit $ 341,938,352 $ 369,432,176 $ 386,019,056 $ 260,753,615

TotaJ net debt applicable to limit 48,518,000 47,568,000 46,383,000 45,183,000

Legal debt margin $ 293,420,352 $ 321,864,176 $ 339,636,056 $ 215,570,615

TotaJ net debt applicable to the limit as a percentage of debt limit 14.19% 12.88% 12.02% 17.33%

a Limit set by NJSA l 8A:24- l 9 for a K through 12 District; other % limits would be applicable for other Districts

Source: Equalized valuation bases were obtained from the AnnuaJ Report of the State of New Jersey, Department of Treasury, Division of Taxation

$

$

2011 2012

385,435,807 $ 368,325,696

43,933,000 42,583,000

341,502,807 $ 325,742,696

11.40% 11.56%

Average equaJized valuation of taxable property

Debt limit• (4 % of average equalization vaJue) Net bonded school debt Legal debt margin

2013 2014

Equalized vaJuation basis 2016 $

2015 2014

$

$

$

$

2015 -

$ 346,251,871 $ 338,350,892 $ 338,546,862 $

41,083,000 38,848,000 35,232,171

$ 305,168,871 $ 299,502,892 $ 303,314,691 $

11.87% 11.48% 10.41%

J-13

8,506,908,491 8,482,594,479 8,489,705,248

25,4 79,208,218

8,493,069,406

339,722,776 33,470,000

306,252, 776

2016

339,722,776

33,432,691

306,290,085

9.84%

131

Year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source:

Parsippany-Troy Hills School District Demographic and Economic Statistics


Morris County Per Capita

Population a Personal Income b Personal Income

49,911 $ 3,604, 123,221 $ 72,211 49,880 3,722,843,680 74,636 49,982 3,524,530,712 70,516 53,255 3,875,898,900 72,780 53,487 4,075,388,478 76,194 53,621 4,216,701,819 78,639 53,767 4,252,64 7,098 79,094 53,683 4,445,489,230 82,810 53,641 4,442,011,210 82,810 53,641 ** 4,442,011,210 82,810

School District Rep01is

J-14

Unemployment

Rated

2.70% 3.60% 7.60% 7.60% 7.10% 7.30% 7.30% 6.10%

* 4.20%

* 4.20%

* Latest Morris County per capita personal income available (2014) was used for calculation purposes. ** Latest population data available (2015) was used for calculation purposes.

a Population information provided by the NJ Dept of Education. b

Personal income was not available, only county average.

d Unemployment data provided by the NJ Dept. of Education.

132

Employer

United Parcel Post Wyndham Automatic Data Processing Avis Deloitte-Touc11e Tiffany and Company State Farm Common Health EBI-Evonik Corp. NY Life Inv. Mgmt.

2016

Parsippany-Troy Hills School District Principal Employers

Current Year and Nine Years Ago Unaudited

Percentage of Total

Employees Employment Emplo~er

l,927 NIA Novartis 1,366 NIA United Parcel 1,300 NIA ADP 1,025 NIA Greystone Psych. 1,000 NIA Realogy Corporation

710 NIA Tiffany & Co. 700 NIA Wyndham Worldwide 555 NIA State Farm Insurance 525 NIA Avis Budget Group, Inc. 500 NIA Deloitte & Touche

9,608

Source: Various Agencies of the Township

J-15

2007

Percentage of Total

Employees Employment

5,000 NIA 2,121 NIA 1,986 NIA 1,300 NIA 1,200 NIA 1,200 NIA

948 NIA 830 NIA 800 NIA 750 NIA

16,135

NIA Total amount of employment is not available in order to calculate percentage of total employment.

133

Function/Program

Instruction: Regular Special Education

Support Services: Student & Instruction Related Services School Administrative Services General & Business Adminsitrative Service Plant Operations and Maintenance Pupil Transportation Business and Other Support Services

Total

Source: District Personnel Records

Parsippany-Troy Hills School District Full-time Equivalent District Employees by Function/Program


2007 2008 2009 2010 2011 2012 2013 2014 2015 --- ---- ---- ---- ----

504.9 91.8

509.3 96.7

544.3 96.3

I 08.4 I 08.8 113.8 34.0 33.0 32.0

5.0 5.0 5.0 111.5 111.5 111.5 24.0 24.0 24.0 82.0 82.0 82.0

961.6 970.3 1,008.9

539.7 104.0

106.0 32.0

5.0 113.5 23.0 80.5

1,003.7

516.4 106.0

107.2 32.0

5.0 94.0 23.0 80.5

964.1

513.1 109.6

519.2 113.0

521.7 112.6

509.0 108.0

109.0 102.4 118.9 104.8 32.0 37.3 35.0 38.0

5.0 3.0 3.0 3.0 94.0 98.5 103.5 110.0 23.0 22.0 22.0 25.0 81.5 81.5 87.0 85.5

967.2 976.9 IJi03T -nu

J-16

2016

519.8 116.0

104.9 40.0 3.0

110.5 26.0 85.0

l,005.2

134

J-17

Parsippany-Troy Hills School District Operating Statistics


Pupil/Teacher Ratio Average Average % Change in

At Daily Daily Average Student June Operating Cost Per Percentage Teaching Middle High Enrollment Attendance Daily Attendance

~ Enrollment Expenditures a Pupil d Change Staffb Elementary School School (ADE) c (ADA) c Enrollment Percentage

2007 7,180 $ 118,968,540 $ 16,569 5.06% 738 10.3:1 10.7:1 10.1: 1 7,180 6,898 1.14% 96.07% 2008 7,252 123, 769,580 17,067 3.00% 742 10.3:1 10.7:1 10.1:1 7,252 7,208 1.00% 99.39% 2009 7,152 125,425,064 17,537 2.75% 745 10.3:1 10.3:1 9.5:1 7,157 6,862 -1.31% 95.88% 2010 7,397 129,222,011 17,470 -0.39% 747 10.5:1 7.4:1 9.5:1 7,274 6,988 1.63% 96.07% 2011 7,321 129,238,649 17,653 1.05% 727 12.3:1 8.1:1 10.0:1 7,194 6,984 -1.10% 97.08% 2012 7,290 131,470,868 18,034 2.16% 729 11.8:1 8.6:1 10.4:1 7,267 6,967 1.01% 95.87% 2013 7,270 133,552,027 18,370 1.86% 735 13:2:1 9.1:1 10.3:1 7,270 6,833 0.04% 93.99% 2014 7,014 136,463,081 19,456 5.91% 753 10.2:1 8.2:1 9.1:1 7,014 6,726 -3.52% 95.89% 2015 6,959 136,363,231 19,595 0.72% 722 12.1:1 9.3:1 10.3:1 6,958 6,686 -0.80% 96.09% 2016 7,014 145,783,457 20,785 6.07% 741 10.5:1 8.5:1 8.7:1 7,014 6,748 0.80% 96.21%

Sources: District records, Schedules J-16, J-18

Note: Enrollment's based October 15, 2015 ASSA/DRTRS count report.

a Operating expenditures equal total expenditures less debt service and capital outlay; (J-4) b Teaching staff includes only full-time equivalents of certificated staff. c Average daily enrollment and average daily attendance are obtained from the School Register Summary (SRS). d Cost per pupil is the sum of operating expenditures divided by enrollment. This cost per pupil may be different from the State's cost per pupil calculations.

135

District Building

Parisppany High School ( 1956) Square Feet Capacity (students) Enrollment

Parsippany Hills High School (1970) Square Feet Capacity (students) Enrollment

Brooklawn Middle School ( 1965) Square Feet Capacity (students) Enrollment

Central Middle School ( 1928) Square Feet Capacity (students) Enrollment

Eastlake Elementa1y School (1967) Square Feet Capacity (students) Enrollment

lntervale Elementary School (1966) Square Feet Capacity (students) Enrollment

Knollwood Elementary School ( 1961) Square Feet Capacity (students) Enrollment

Lake Hiawatha Elementary School (1952) Square Feet Capacity (students) Enrollment

Lake Parsippany Elementary School ( 1949) Square Feet Capacity (students) Enrollment

Littleton Elementary School (1958) Square Feet Capacity (students) Enrolhnent

Mt. Tabor Elementary School ( 1930) Square Feet Capacity (students) Enrollment

Northvail elementary School ( 1966) Square Feet Capacity (students) Enrollment

Rockaway Meadow Elementary School ( 1966) Square Feet Capacity (students) Enrollment

Troy Hills Elementary School ( 1964) Square Feet Capacity (students) Enrollment

Other: Windish Administration (1965)

Square Feet Maintenance Building ( 1900)

Square Feet Board Office (acquired in 2006)

Square Feet

Number of Schools at June 30, 2016 Elementary = 10 Middle School ~ 2 High School ~ 2 Other~ 3

2007

166,512 817 975

202,899 837

I, 197

l l l,126 771 885

91,441 620 791

31,589 289 314

27,771 490 275

33,880 298 309

38,314 371 332

36,747 376 356

41,890 371 466

34,350 337 273

32,798 298 356

36,366 277 317

36,954 326 334

9,000

4,074

27,500

2008

166,512 817

1,009

202,899 837

l,177

111, 126 771 927

91,441 620 797

31,589 289 298

37,73 l 490 327

33,880 298 327

44,424 371 373

36,747 376 335

41,890 371 416

42,712 337 330

32,798 298 322

36,366 277 273

36,954 326 334

9,000

4,074

27,500

Source: District records, SRS as of June 30, State's Final Determination Letter

Parsippany~ Troy Hills School District School Building Information


2009

174,377 1,106 1,020

218,009 l,230 1,166

125,310 900 915

138,221 846 755

31,589 266 283

37,731 286 314

33,880 281 33 l

44,424 328 407

36,747 297 324

41,890 320 394

42,712 302 350

32,798 278 320

36,366 280 280

36,954 289 320

9,000

4,074

27,500

2010

174,377 1,106 1,043

218,009 l,230 1,153

125,310 900 872

138,221 846 762

31,589 266 277

37,731 286 331

33,880 281 359

44,424 328 436

36,747 297 314

41,890 320 368

42,712 302 396

32,798 278 358

36,366 280 265

36,954 289 325

9,000

4,074

27,500

2011

174,377 l,106 1,043

218,009 l,230 l,132

125,310 900 861

138,221 846 792

31,589 266 33 l

37,73 l 286 316

33,880 281 323

44,424 328 400

36,747 297 321

41,890 320 393

42,712 302 423

32,798 278 367

36,366 280 280

36,954 289 307

9,000

4,074

27,500

Note: Year of original construction is shown in parentheses. Increases in square footage and capacity are the result of renovations and additions. Enrollment is based on the annual October District count.

2012

174,377 l,106 1,008

218,009 l,230 1,139

125,310 900 844

138,221 846 812

31,589 266 338

37,731 286 298

33,880 281 312

44,424 328 431

36,747 297 334

41,890 320 381

42,712 302 430

32,798 278 371

36,366 280 270

36,954 289 302

9,000

4,074

27,500

2013

174,377 1,106 1,008

218,009 1,230 l,139

125,310 900 844

138,221 846 812

31,589 266 338

37,731 286 298

33,880 281 312

44,424 328 431

36,747 297 334

41,890 320 381

42,712 302 430

32,798 278 371

36,366 280 270

36,954 289 302

9,000

4,074

27,500

2014

174,377 1,106

971

218,009 1,230 l,071

125,310 900 881

138,221 846 753

31,589 266 335

37,731 286 285

33,880 281 331

44,424 328 423

36,747 297 320

41,890 320 359

42,712 302 406

32,798 278 368

36,366 280 245

36,954 289 266

9,000

4,074

27,500

2015

174,377 1,106

932

218,009 1,230 1,055

125,310 900 863

138,221 846 761

31,589 266 323

37,731 286 297

33,880 281 347

44,424 328 417

36,747 297 318

41,890 320 369

42,712 302 414

32,798 278 362

36,366 280 252

36,954 289 249

9,000

4,074

27,500

J-18

2016

174,377 l,106

928

218,009 l,230 1,032

125,310 900 878

138,221 846 790

31,589 266 312

37,73 I 286 299

33,880 281 365

44,424 328 427

36,747 297 298

41,890 320 393

42,712 302 403

32,798 278 375

36,366 280 243

36,954 289 248

9,000

4,074

27,500

136

School Facilities

Parsippany High School $ Parsippany Hills High School Brooklawn Middle School Central Middle School Eastlake Elementary School Intervale Elementary School Knollwood Elementary School Lake Hiawatha Elementary School Lake Parsippany Elementary School Littleton Elementary School Mt.Tabor Elementary School Northvail Elementary School Rockaway Meadow Elementary School Troy Hills elementary School Administration Building Maintenance Building

Grand Total $

Source: District records of required maintenance.


Schedule of Required Maintenance for School Facilities Last Ten Fiscal Years

Unaudited

UNDISTRIBUTED EXPENDITURES - REQUIRED MAINTENANCE FOR SCHOOL FACILITIES 11-000-261-XXX

2007 2008 2009 2010 2011 2012

78,787 $ 67,224 $ 56,790 $ 73,502 $ 267,218 $ 350,175 $ 61,447 65,024 63,925 96,302 336,581 334,563 48,824 50,945 42,854 54,691 244,553 269,543 50,961 46,174 43,382 62,692 258,973 201,581 17,715 16,878 13,701 13,495 68,556 148,268 18,026 21,273 10,216 24,362 88,620 69,804 19,828 19,616 12,432 16,513 54,310 48,476 13,503 22,321 19,793 22,075 99,239 127,723 18,149 22,410 22,702 26,619 136,929 76,337 23,906 19,978 14,591 13,391 85,716 62,744 15,138 25,759 25,406 32,716 167,401 81,104 20,506 17,732 12,350 20,923 83,721 73,647 19,232 19,294 13,097 35,660 69,554 62,796 18,539 24,336 11,408 22,300 75,759 73,762

1,482,103 1,637,502 1,643,930 1,540,299 140,114 116,345 38,169 43,893 77,071 82,178 13,008 10,844

2013

328,401 410,880 225,776 246,301

61,575 82,100 81,995

102,625 61,600 61,578 61,580 61,599 82,140 82,106 82,105 20,525

1,944,833 $ 2,120,359 $ 2,083,648 $ 2,137,718 $ 2,190,252 $ 2,107,712 $ 2,052,886

J-19

2014 2015 2016 -

$ 386,218 $ 436,982 $ 444,752 483,520 547,074 556,802 277,542 314,022 319,606 289,650 327,722 333,549

69,345 78,459 79,854 86,450 97,813 99,552 75,039 84,902 86,412 98,392 111,325 113,304 81,389 92,087 93,724 92,780 104,975 106,841 94,600 107,035 108,938 72,642 82,191 83,652 80,545 91,132 92,752 81,847 92,605 94,252 80,842 91,468 93,094

9,024 10,209 10,391

$ 2,359,825 $ 2,670,001 $ 2,717,475

137

Parsippany-Troy Hills School District Insurance Schedule

Year ended June 30, 2016 Unaudited

Type of Coverage Coverage

School Package Policy: School Alliance Insurance Fund:

Workers' Compensation/Employers' Liability General and Automotive Liability:

Aggregate Occurrence

Excess General and Auto Liability: Aggregate Occurrence

Employee Benefits Liability: Occurrence

Money and Securities Property, Inland Marine and Automobile Physical Damage:

Occurrence Employee Dishonesty School Leaders' Professional Liability:

Aggregate Boiler and Machinery:

Occurrence Environmental Impraiment Liability:

Aggregate Occurrence

Critical Incident Management

Student Accident Coverage - Transamerica Premier Life Insurance Co. All Students & Athletes

Public Officals Bond - Selective Insurance Business Administrator/Board Secretary Treasurer

Rockaway Meadow School Flood Liability - Selective Insurance Building Contents

Source: District Records

$ 5,000,000

I 00,000,000 5,000,000

5,000,000 5,000,000

5,000,000 2,500,000

250,000,000 500,000

5,000,000

100,000,000

25,000,000 l,000,000

25,000

5,000,000

650,000 650,000

500,000 500,000

Deductible

$

J-20

1,000

2,500

10,000

2,500

10,000 10,000

1,000 l,000

138

Single Audit Section

wss A Partner to Grow With

K-1

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed

in Accordance with Government Auditing Standards



Parsippany-Troy Hills School District Parsippany, New Jersey County of Morris

We have audited, in accordance with the auditing standards generally accepted in the United States of America; audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Board of Education of the Parsippany-Troy Hills School District, in the County of Morris, New Jersey (the "District") as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and have issued our report thereon dated December 2, 2016.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.

14 Penn Plaza, Suite 1010 New York, NY 10122

212.594.8155

354 Eisenhower Parkway, Su ite 1850 Livingston, NJ 07039

973.994.9400

139

5 Bartles Corn er Road Flemington, NJ 08822

908.782.7300

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and the audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.



No. 1049

trl.w- cf' &.+a WISS & COMPANY, LLP

140

WISS A Partner to Grow With

K-2

Report on Compliance For Each Maj or Federal and State Program and on Internal Control Over Compliance Required by the

Uniform Guidance and New Jersey OMB 15-08



Parsippany-Troy Hills School District Parsippany, New Jersey County of Morris

Report on Compliance for Each Major Federal and State Program

We have audited the Parsippany-Troy Hills School District, in the County of Morris, New Jersey (the "District") compliance with the types of compliance requirements described in the OMB Compliance Supplement and the New Jersey State Aid/Grant Compliance Supplement that could have a direct and material effect on each of the District's major federal and state programs for the year ended June 30, 2016. The District's major federal and state programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with federal and state statutes, regulations, and the terms and conditions of its federal and state awards applicable to its federal and state programs.

Auditors' Responsibility

Our responsibility is to express an opinion on compliance for each of the District's major federal and state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance); and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Those standards, the Uniform Guidance and New Jersey OMB Circular 15-08 require that we plan and perform the audit to obtain reasonable

14 Penn Plaza, Su ite 1010 New York, NY 10122

212.594.8155

354 Eisenhower Pa rkway, Suite 1850 Livingston, NJ 07039

973.994.9400

141

5 Bart les Co rn er Road Flemington, NJ 08822

908.782.7300

assurance about whether noncompliance with the types of compliance requirements refetTed to above that could have a direct and material effect on a major federal and state program occutTed. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal and state program. However, our audit does not provide a legal determination of the District's compliance.

Opinion on Each Major Federal and State Program

In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal and state programs for the year ended June 30, 2016.

Report on Internal Control Over Compliance

Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal and state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal and state program and to test and report on internal control over compliance in accordance with the Uniform Guidance and New Jersey OMB Circular 15-08, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

142

Purpose of this Report

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and New Jersey OMB Circular 15-08. Accordingly, this report is not suitable for any other purpose.



No. 1049

uJµ.., of' 4-o WISS & COMPANY, LLP

143

Federal Grantor/Pass.-Throueh Grantor/Proe:ram Tide

Feder.ii

CFDA

Number

Federal

FAIN

Number

U.S. Department of llealth and Hwnan Sen ices Passed-through State Department of Education: Medicaid Assistance 93.778 !605NJMAP Medicaid Assistance Medicaid Assistance

Tobi U.S. Dl-partment of Ht'alth and Hwn:m SeniCt'S

Tota!GC11er..1\Fund

U.S. Department of Education-Passed-Throueh State

Department of Education

Speci:il Re''t'nUe Fund:

Title!

Title!

Title I!. Part A

Tit!el!.PartA

Tit~Il.PartA

Title!!!

Title!!!

Title Ill

Title Ill-immigrant

Special Education Oustt'r:

LO.EA. Part B, Regular

LO.EA. Part B. Regular

1.0.E.A. Part B. Preschool

!.D.E.A. Pan B. Preschool

U.S. Departmt"nt of Homeland Security Passe11-throu:;i State Dt"partrmmr of Education

Disaster Grauts - Public Assistance (Presidentially Declared Disru.1<..-rs)

Total Special Re\C11ue Fund

U.S. Department of A~riculturc-P::issed-Throueh Statt"

Department of Education

Enlerpriscfund:

U.S.D.A Food Donation Proi:.ram (NC)

U.S.D.A Food Donation Proi:.ram (NC}

National School Breakfast Proi:.ram

National School Brtakfast Progmm

National School Lunch Program

National School Lunch Program

Total Enterprise Fund and Total U.S. Dcpt1rtm<..-nt or Asricuhure-

Passcd-TI1rough State Department of Education

Tot:il Federal Awards

NC - non cash CXp<--nditure

93.778 93.778

&4.0IOA

8-l.OIOA

8-l.367A

8-t.367A

84.367A

&4365A

84.365A

84.365A

84.365

84.027

84.027

84.!7J

84.173

97.036

l0.555

10.555

!0.553

!0.553

l0.555

10.555

!605NJMAP 1605NJMAP

S010A!50030

S010A150030

S367A!50029

S367Al50029

S367Al50029

S365Al50030

S365A\50030

S365Al50030

S365A!50030

S027Al50100

S027Al50100

S!73Al50114

Sl73AJ50114

NIA

!616\NJ3o.tNI09

!6l61NJ304NI09

!616!NJ304N109

!6!6!NJ304Nl09

!6!6!NJ304Nl09

16161NJ3Q..l.N109

Grant or

State Period Grant

Nwnber Period

NIA 71!1!5-6130116 NIA 7!!!!4-61301!5

NIA 71!/13-6.'301!6

NCL83950!6 7fl!l5-6130116

NCL8395015 9(!1!3-6130115

NCL8395016 7/!i!5-6130fl6

NCLB395015 7/l/14-6130115

NCLB395014 9/l/13-61J01!5

NCL8395016 711115-6130116

NCLB3950!5 711114-6130115

NCL8395014 911113-6130115

NCLB395016 111115-61301\6

IDEA395016 711115-6130116

JDEA395015 911'13-61301!5

rDEA3950l6 711115-6130116

!DEA.395015 9JJIJ3-6/30/15

NIA 101291!2-6!30/\6

NIA 711115-6130116

NIA 71\/J.J.-6/30115

NIA 711115-61301\6

NIA 711114-6/30'15

NIA 71!/!5-6130/16

NIA 7.'!!!.J.-61301 15

Parsippany-Troy Hills Schoo! District

Schedule -0fExpcnditurcs of Federal Award~

YcarendedJune30.2016

8alanceJune30.2015

Award {Accounts Unc-amed Due to

Carryover/

(\Valkowr) Cash Bud~etary

Amount Recei\•able-) Revenue Grantor Amount Re.:eh•ed E:!ipenditures Ad.iusfments

75.896 75.896 s 75.896 118.473 s (24.214) 2.J..21.J.

12.75l ___ _ !2.751

(24.2!4) 100.110 88.647

(24.214) 100.110 88.647

436.988 231.981 .J.02.9-03

264.644 {101.476) 104.702 31,844

51.59! 35,097 45.724

52.347 {19.893) 72.657 19.975

103.878 42.113

158.021 33.776 54.764

!70.608 16.375 93.430 !05.674

95.309 (10.&41)

80.415 45.200 67.199

1.620.502 !.201.545 !.507.483

1.593.169 {631.368) 818330 226.921

57514 47.134 57.57.J.

56.150 (15.053) 15.053

61.160 61.160

(778.63!) 58.488 2.698,905 2.581.221

192.925 192.925 190.075

181.904 13.56! 13,561

22.171 17.509 22.!7!

7.509 (2.2!6) 2.216

493.!98 404.777 493.198

495,!16 (\00,673) 100.673

(102.889) 13.561 718.!00 719.005

Rep:i)ment

of Prior

Years'

Bal:inces

(Accounts

Rect'iv:iblc)

(12.751)

(!2.751)

(12.751}

(170.922}

(28.6!8)

(\0,627)

(20.988)

(10.841)

(21.999)

(305.938)

(39.959}

(!0.440)

(61.160)

(681.492)

(-1.662)

(88.421)

(93.083)

(905.734) S 72.().19 S - S S 3.517,Jl.5 S_ 3,3l!J!;,8li____±___ _-_S__ _ __ - _S __ (787326) S

B:ii:ineeJuneJ0.2016

Une:imed

RcVt"nul'

32.789

42.113

4.!3!

79.0.U

2.850

2.850

81,883 s

144

K-3 Schedule A

Due to

Gr:intor


Schedule of Expenditures of State Financial Assistance


Repayment Grant or Balance at June JO, 2015 of Prior Balance at June 30. 2016

State Project Grant Award Unearned Rev. Due to Carryover/ Cash Budgetary Years' Unearned (Accounts Due to Memo

K-4 ~

State Grantor/Program Title _Nl!!!lber P_t!ti_()~--- Amount (At:i:tsJl_J?<:) Grantor Walkover Received Exrenditures Balances Adjustments Revenue Receivable) Grantor Budgetary Receivable

Cumulative Expenditures

State Department of Education General Fund:

Special Education Cate2orical Aid Special Education Cateiwrical Aid Equalization Aid Equaliz.1tion Aid Security Aid Security Aid

Additional Adjustment Aid Transportation Aid Transportation Aid P ARCC Readiness Aid P ARCC Readiness Aid Per Pupil Growth Aid Per Pupil Growth Aid Extraordinary Aid Extraordinary Aid Additional NP Transportation Aid Additional NP Transportation Aid Homeless tuition reimbursement On-BehalfTP AF Pension and Medical Contributions Reimbursed TP AF - Social Security Reimbursed TP AF - Social Security

Total General Fund

Special Revenue Fund: Non Public Auxiliary Services (Ch. 192):

Compensatory Education

Non Public Handicapped Services (Ch. I 93): Supplemental Instruction Examination and Classification Examination and Classification Corrective Speech Corrective Speech

New Jersey Non-Public Aid: Nursini;;

Textbook Aid Textbook Aid Technolop;y Aid Security Aid

Total Special Revenue Fund

Capital Projects Fund: New Jersey School Development Authority Grants

Total Capital Proiects Fund

Debt Service Fund:

Type II Aid

Total Debt Service Fund

State Department of Agriculture

Enterprise Fund:

State School Lunch Program (State share)

State School Lunch Program (State share)

Total Enterprise Fund

Total State Financial Assistance

State Financial Assistance Not Subject to Single Audit Detennination:

On-Behalf TPAF Pension and Medical Contributions Total State Financial Assistance Subject to

Single Audit Detennination

495-034-5120-089 495-034-5120-089 495-034-5120-078 495-034-5120-078 495-034-5120-084 495-034-5120-084 495-034-5120-085 495-034-5120-014 495-034-5120-014 495-034-5120-098 495-034-5120-098 495-034-5120-097 495-034-5120-097 100-034-5120-473 100-034-5120-473

Not available Not available Not available

495-034-5095-00110061007 495-034-5095-002 495-034-5095-002

I 00-034-5120-067

l 00-034-5120-066

100-034-5120-070 100-034-5120-064 I 00-034-5120-064 100-034-5120-373 100-034-5120-509

Various

100-034-5120-075

100-010-3350-023

100-0 I 0-3 3 50-023

4 95-034-509 5-00 I /006/007

7/1/15-6/30/16 7/1/14-6/30/15 7/1/15-6/30/16 7/1/14-6130/!5 7/1/15-6/30/16 7/1/14-6130/15 7/1/15-6/30/16 7 /l /15-6/30116 7/l/14-6/30/15 7/1/15-6/30/16 711/14-6130/15 7 /l /15-6/30/16 7/J/14-6/30/15 7/1/15-6/30/16 7/1/14--6/30/15 7/1/15--6/30/16 711114-6/30/15 7/l/l5-6/30/16 7/1/15-6/30/16 7/1/15-6/30/16 711/14-6/30115

7/1/15-6/30/16

7/1/15-6/30/16 7/1/15-6130/16 7/l/!4-6/30/!5 711115-6130116 711114-6/30/15

7/1/15-6/30/16 711115-6130116 7/1/l4-6/30/15 7/l/15-6130/16 7/1/15-6/30/!6

7/1/2013- completion

711115-6130116

7/1/15-6/30/16

711/14-6/30/15

7/1/15-6/30/16

$ 3,956,158 3,956.158 $ (386,768)

95.367 95.367 (9,324)

132,915 132,915 (12,994)

l 295,061 295.061 (28,846) 69,790 69,790 (6,823) 69,790 69,790 (6.823)

1.054,238 715.110 (715.110)

57,361 61,157 (61,157) 13,213

9.826.665 4,236,382 4,168,356 (205,466)

(l,433.311)

39,594

20,792 29.826 31.695 19,230 25,622

46,260 29,350 31,280 13,364 12,850

757.044 (757.044)

(757,044)

568,629

20.825

21,585 (4,941)

(4,941)

$ l,411

13,960

7,259

22.630

3,567,787 386,768 86,005

9,324 119,867

12,994 l

266,095 28,846 62,939

6,823 62,939

6,823

715,110

61,157

9,826.665 4,236.382

205.466

19,661,991

39,594

20,792 29,826

19,230

46,260 29,350

13,364 12.850

211,266

568,629

568,629

17,101

4,941 22,042

$ 3,956.158

95,367

132,915

295,061

69,790

69,790

l,054,238 (l,054,238)

57,361 (57,361)

13.213 (!3.213) 9,826.665 4,236.382

19,806,941 (l,124,812)

39,594

18,044 23.865

$ l,411 7,525

13,960

32,670 26,139

7,259

13.364 12,850

174,051 22,630

(757,044)

(757,044)

568,629

568,629

20,825 (3,724)

20,825 (3,724)

2,748 5,961

ll,705

13.590 3,21 l

37,215

(388,371)

(9.362)

(13,048)

(28,966)

(6,85!)

(6,85!)

~49)

3,956,158

95,367

132,915

295,061

69,790

69,790

1,054,238

57,361

13.213 9,826.665 4,236,382

19,806,941

39,594

18,044 23,865

7,525

32,670 26.139

13.364 12,850

174,051

568,629

568,629

20,825

20,825

(2,195.296) $ 22,630 $ • $ 20,463,928 $ 20.570,446 $ 2i6'9 __ $ • $ _,_ $ Cl 885 5801 $ 37,215 $ C453.449l $ 20 570 446

9.826,665 (9,826,665) (9 826 665) (9,826,665)

(2,195.296) $ 22,630 $ - $ J 0,637 ,263 $ 10,743,781 $ 22,630 $ - $ (1,885,580) $ 37,215 (453,449) $ 30,397,111

145

1. General


Notes to Schedules of Expenditures of Federal A wards and State Financial Assistance


K-5 p.1

The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all expenditures of federal awards and state financial assistance programs of the District. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, are included on the schedules of expenditures of federal awards and state financial assistance.

2. Basis of Accounting

The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the food service enterprise fund and the capital projects fund which are presented using the accrual basis of accounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules is presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some of the amounts presented in this schedule may differ from amounts presented, or used in the preparation of, the basic financial statements.

3. Relationship to Basic Financial Statements

Amounts reported in the accompanying schedules agree with amounts reported in the District's basic financial statements. The basic financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison schedules and statements (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the audit year, whereas for GAAP rep01iing, revenue is not recognized until the subsequent year or when expenditures have been made.

146


Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance


3. Relationship to Basic Financial Statements (continued)

K-5 p.2

The general fund is presented in the accompanying schedules on the modified accrual basis with the exception of the revenue recognition of the last state aid payments in the current budget year, which is mandated pursuant to N.J.S.A. 18A:22-44.2. For GAAP purposes, these payments are not recognized until the subsequent budget year due to the state deferral and recording of the last state aid payments in the subsequent year. The special revenue fund is presented in the accompanying schedules on the grant accounting budgetary basis which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. The special revenue fund also recognizes the last state aid payments in the current budget year, consistent with N.J.S.A. 18A:22-44.2.

The net adjustment to reconcile from the budgetary basis to the GAAP basis is $1,871 for the general fund and $8,993 for the special revenue fund. See Note to Required Supplementary Information (C-3) for a reconciliation of the budgetary basis to GAAP of accounting for the general and special revenue funds. Financial award revenues are reported in the District's basic financial statements on a GAAP basis as follows:

Federal State Total

General Fund $ 88,647 $19,805,070 $19,893,717 Special Revenue Fund 2,590,205 174,051 2,764,256 Debt Service Fund 568,629 568,629 Food Service Enterprise Fund 719,005 20,825 739,830 Total financial award revenues $ 3,397,857 $20,568,575 $23,966,432

The adjustment to reconcile from budgetary basis accounts receivable to GAAP basis accounts receivable is $2,427 for the special revenue fund. This is a result of recognizing encumbrances as expenditures on the budgetary basis but not the GAAP basis.

147


Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance


4. Relationship to Federal and State Financial Reports

K-5 p.3

Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports.

5. Other

Revenues and expenditures reported under the Food Donation Program represent current year value of USDA commodities received and current year distributions, respectively. TP AF Social Security Contributions represent the amount reimbursed by the State for the employer's share of Social Security contributions for TP AF members for the year ended June 30, 2016.

The post retirement pension and medical benefits on-behalf of the District for the year ended June 30, 2016 amounted to $9,826,665. Since on-behalf post retirement pension and medical benefits are paid by the State directly, these expenditures are not subject to a single audit in accordance with New Jersey OMB's Circular 15-08. However, they are required to be reported on the Schedule of Expenditures of State Financial Assistance, as directed by the funding agency.

In addition, The District did not utilize the 10% de minimis indirect cost rate.

148


K-6 p. 1

(continued)

Schedule of Findings and Questioned Costs


Part I - Summary of Auditors' Results

Financial Statement Section

Type of auditors' report issued:

Internal control over financial reporting:

Material weakness( es) identified?

Significant deficiency(ies) identified?

Noncompliance material to financial statements noted?

Federal Awards Section

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

Unmodified

Yes

Yes

Yes

No

None __ ./ __ Reported

./ No

$750,000

Yes ./ No

Unmodified Type of auditors' report on compliance for major programs: -----------~

Internal control over major federal programs:

Material weakness(es) identified? Yes

Significant deficiency(ies) identified? Yes

./ No

None __ ./ __ Reported

Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Yes ./ No

Identification of major federal programs:

CFDA Number(s)

84.0lOA 84.027 84.173

FAIN Number

S010Al50030 S027 A150100 S173A150114

Name of Federal Program or Cluster

Title I Part A IDEA, Part B, Basic Cluster IDEA, Part B, Preschool Cluster

149

Parsippany-Troy Hills School District Schedule of Findings and Questioned Costs


Part I - Summary of Auditors' Results

State Awards Section

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

Type of auditors' report on compliance for major state programs:

Internal control over compliance:

Material weakness(es) identified?

Significant deficiency (ies) identified?

Any audit findings disclosed that are required to be reported in accordance with NJOMB Circular 15-08?

Identification of major state programs:

$750,000

Yes

Unmodified

Yes

Yes

Yes

K-6 p.2

(continued)

No

No

None Reported

No

GMIS/Program Number Name of State Program or Cluster

495-034-5120-089 100-034-5120-4 73 495-034-5120-098 495-034-5120-097 495-034-5120-078 495-034-5120-084 495-034-5120-085

Special Education Categorical Aid Extraordinary Aid

P ARCC Readiness Aid Per Pupil Growth Aid

Equalization Aid Security Aid

Additional Adjustment Aid

150




Part II - Schedule of Financial Statement Findings

K-7 p. 1

(continued)

No financial statement findings noted that are required to be reported under Government Auditing Standards.

151




Part III - Schedule of Federal Award and State Financial Assistance Findings and Questioned Costs

This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including questioned costs, related to the audit of major federal and state programs, as required by 2 CFR 200 Section 516(a) and New Jersey Treasury Circular OMB 15-08, respectively.

Federal Award Programs

No compliance or internal control findings noted that are required to be reported in accordance with 2 CFR 200 Section 516(a).

State Award Programs

No compliance or internal control findings noted that are required to be reported in accordance with New Jersey Treasury Circular OMB 15-08.

152

K-7 p.2


Summary Schedule of Prior Year Audit Findings


2015-001 Eligibility- Target Assistance (Significant Deficiency)

Federal Programs U.S. Department of Education passed through the State Department of Education

Title I, Part A (84.010)

K-8

Statement of Condition: The District did not provide documentation supporting their inclusion of eleven students as eligible for targeted assistance.

Status: This condition has been corrected.

153

parsippany-troy hills - new jersey · 2016. 12. 2. · parsippany-troy hills township schools 292...

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